News

Class action planned against MG

By Geoff Adams

MELBOURNE LAW firm Slater and Gordon proposes to launch a class action against milk processor Murray Goulburn on behalf of unit trust holders.

The action claims the company misled unit holders with its profit forecasts prior to the profit downgrade and the milk price crash in 2016.

The law suit also claims that Murray Goulburn breached its disclosure obligations.

Slater and Gordon and litigation funder IMF Bentham Ltd opened registrations for a class action last week.

The proposed claim is open to all current and former investors who acquired units in Murray Goulburn’s listed entity MG Unit Trust between May 29, 2015 and April 26, 2016, including through the initial public offering in 2015.

Slater and Gordon senior associate Andrew Paull said registrations for unit holders would be open until May 18, with formal proceedings expected to be filed soon after that date, subject to sufficient interest.

“Thorough analysis of the recent ACCC and ASIC inquiries into Murray Goulburn have strengthened our initial findings that suggest the company misled the market by forecasting profits it could never have achieved in the 2016 financial year,” Mr Paull said.

“We have identified significant inconsistencies between Murray Goulburn’s statements to the market regarding its likely revenue and profits that year and the information available to the company’s management internally.

“As a result, we now have increased confidence the April 27, 2016 profit downgrade was the result of an overly optimistic forecast, rather than any factors beyond its control.”

Murray Goulburn has noted the announcement by the legal firm and noted that no claim has yet been started. Any further comment was considered premature.