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Slater & Gordon rallies shareholders for Elders class action
Law firm Slater & Gordon has confirmed it is continuing an investigation into a shareholder class action against Elders._x000D_
The New Lawyer
LAW firm Slater & Gordon has confirmed it is continuing an investigation into a shareholder class action against Elders. Slater & Gordon practice group leader, Ben Phi, confirmed the class action against Elders Limited, following the company’s profit downgrade on 22 June this year. The law firm has based its case on Elders’ announcement to the market on that day that it expected its 2010 financial year results would be significantly lower than what it had forecast in its September 2009 Prospectus. On 5 July 2010, Elders disclosed to the ASX that ASIC was conducting enquiries in relation to the company's compliance with its continuous disclosure obligations following the profit downgrade. Today, Elders disclosed to the ASX that "...ASIC had concluded its enquiries in relation to Elders' profit downgrade of 22 June 2010" and did not propose to take further action in respect of the matter. In July, Elders confirmed ASIC had been sniffing around. It said: ''ASIC has specifically confirmed with the company that its inquiries should not be construed as an indication by ASIC that a contravention of the law has occurred, and nor should it be considered a reflection upon any person or entity.,” the Sydney Morning Herald reported at the time. Elders’ chief executive Malcolm Jackman confirmed to media that a letter had been received in July, prompting the agribusiness group to seek legal advice. “We took a view that when ASIC is making inquiries around your continuous disclosure, it’s a sensible thing to disclose that,” Jackman said of his decision to advise the market. He said the company believed it had complied fully with its continuous disclosure obligations. Slater & Gordon’s Phi said the firm was not privy to the nature and extent of ASIC’s investigations in this area, nor had the law firm seen ASIC’s full response to Elders. According to Slater & Gordon’s Phi: “It is our opinion, based on our independent investigations, that there is a reasonable basis to allege that Elders breached its continuous disclosure obligations by failing to disclose to the market prior to 22 June 2010 that it was increasingly unlikely to meet its profit forecast for the 2010 financial year. “Furthermore, there are reasonable grounds to allege that Elders did not have a reasonable basis for making the forecast in its prospectus on 4 September 2009." "The claim against Elders is at an advanced stage and, as is our customary practice, we will offer the company the opportunity to respond to our allegations prior to the commencement of proceedings,” he said.
