CLASS ACTION LOOMS OVER QUINTIS FOLLOWING CLAIMS OF MISLEADING CONDUCT
Written on the 22 May 2017 by Business News Australia
NATIONAL law firm Piper Alderman, in partnership with litigation funder Litigation Capital Management (ASX: LCA), has announced a potential class action against Sandalwood producer Quintis Limited (ASX: QIN) on the grounds of misleading conduct.
Piper Alderman is investigating on behalf of aggrieved shareholders who were short-changed by Quintis' failure to disclose the loss of its major supply contract with skincare provider Galderma.
Quintis terminated its contract with Galderma in December 2016, yet did not inform the market that it had done so until earlier this month.
Immediately following the revelation that Quintis has lost the contract, its share price plummeted from $1.07 to $0.29, wiping $309 million off its market cap.
Piper Alderman litigation partner Simon Morris says this choice by Quintis amounts to one of the most severe disclosure breaches possible.
"It is hard to imagine a more egregious contravention of the Corporations Act to make continuous disclosure of information that is likely to have a material effect on the price of a security or the prohibition against conduct that is misleading or deceptive, or likely to mislead or deceive," says Morris.
"The severity of the market's reaction strongly points to the distorting effect on the share price. Investors who have suffered losses have a right to be compensated."
Quintis announced its suspension from official quotation on Wednesday last week, pending a further update.
Litigation Capital Management managing director Patrick Moloney says the market was "shocked" by Quintis' actions, and shareholders are bracing for yet another announcement which could wipe further value off the already battered share price.
"The market was shocked by the recent announcement that this supply contract had in fact been terminated last December and shareholders are bracing for a further announcement following the trading halt," says Moloney.
"It is clear that investors have been deprived of certain information and we are investigating whether there is a viable basis for a class action to recoup the losses they have suffered as a result."Never miss a story: Sign up to Business News Australia's free news updates.
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Author: Business News Australia