Class action against GetSwift gets Federal Court go-ahead
Written on the 23 May 2018 by Ben Hall
The filing of a class action law suit against logistics software company GetSwift (ASX: GSW) has been approved by the Federal Court with the aggrieved shareholders now ordered to file a statement of claim against the company.
The Federal Court considered three separate class actions against GetSwift and ruled that the claim by law firm Phi Finney McDonald should proceed while the two other class actions should be permanently stayed.
GetSwift, which is run by CEO Bane Hunter (pictured left) and former AFL player and entrepreneur Joel McDonald, was facing up to three separate class action law suits over allegations it has engaged in misleading and deceptive conduct relating to continuous disclosure breaches to the market.
The successful class action from Phi Finney McDonald does not disclose an amount of compensation being sought, but in an announcement to the ASX, GetSwift says the other claims were for approximately $75 to $100 million and $120 to $140 million.
GetSwift says this is a reduction of between 50 to 75 per cent on the previously reported claim size.
"The company strongly disputes the allegations made, including any alleged loss, and will vigorously defend the proceedings," the ASX statement says.
In February, law firm Squire Patton Boggs applied to commence the class action against GetSwift in the Federal Court, while litigation funder Vannin Capital together with law firm Corrs Chambers Westgarth along with MC Lawyers indicated they were also investigating the possibility of launching a class action.
It's been alleged GetSwift breached its obligations to the market in announcing deals with The Fruitbox Company, the Commonwealth Bank and Fantastic Furniture, with those deals subsequently either cancelled or subject to ongoing review.
The company confirmed in February it received notice from the Australian Securities and Investments Commission (ASIC) that it is "under investigation" as the company revealed a blowout in losses of nearly 1,000 per cent.
In its half yearly update released to the market shortly after the ASIC investigation was announced, the company revealed its net loss after tax had blown out by 964 per cent to $5.5 million from $516,000 in the prior corresponding period.
Ahead of the ASIC investigation and the class action being lodged, GetSwift spent nearly a month in a trading halt as it worked through its disclosure issues with the ASX.
Last month, the company announced a board shakeup which included Bane Hunter taking over as CEO from Joel McDonald along with a promise to address its governance practices.
In December, GSW shares were trading at $4.30 and on Wednesday they were $0.44.
Business News Australia
Author: Ben Hall