SLATER & GORDON FACES THIRD MAJOR LEGAL CLAIM ARISING FROM ITS BILLION DOLLAR FALL FROM GRACE
Written on the 8 June 2017 by Ben Hall
EMBATTLED law firm Slater and Gordon (ASX: SGH) is facing another legal battle with one of its shareholders announcing it will commence proceedings alleging the company produced misleading full year results for three years in a row.
Slater and Gordon, already facing the potential for two class actions from disgruntled shareholders, confirmed it received a letter from Johnson Winter & Slattery Lawyers (JWS) saying it was acting on behalf of a shareholder, Babscay Pty Ltd, and that it intended to begin legal proceedings.
"While full details of the proposed claim have not been provided, the letter from JWS sets out the claim will be based on allegations the company's financial statements in each of the financial years ended 30 June 2013, 2014 and 2015 contained misleading representations," the company says.
Slater and Gordon says no details were included in Babscay's letter and no claim has been filed or served on the company.
In April, ACA Lawyers issued a formal letter of demand to Slater and Gordon MD Andrew Grech, laying the foundation for a class action.
ACA became the second firm to begin a class action after Maurice Blackburn started its own proceedings on behalf of 3,000 shareholders alleging Slater and Gordon failed to disclose vital information relating to the acquisition of professional services business, Quindell in the UK.
Slater and Gordon's spectacular fall from grace has seen its market value fall from $2.8 billion in April 2015 to just $32 million as a result of the disastrous acquisition of Quindell which cost $1.2 billion.
In May, Slater and Gordon's UK subsidiary announced it would lodge a $1 billion fraud claim against the company from which it bought Quindell, alleging Watchstone Group made "fraudulent misrepesentations" over the purchase.
SGH shares are trading at 9.4 cents, just over one per cent of their value of $8.07 in April 2015."
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Author: Ben Hall