Slater & Gordon files class action against Treasury Wine Estates

Slater & Gordon files class action against Treasury Wine Estates

Treasury Wine Estates (ASX: TWE) is now facing its second class action over a profit downgrade earlier this year when its earnings forecast was slashed by 10 percentage points.

Following a similar action from Maurice Blackburn, law firm Slater & Gordon (ASX: SGH) alleges the information could have been uncorked earlier.

"On the basis of SGH's investigations to date, we consider that there is likely to be a reasonable basis to allege that TWE contravened its obligations of continuous disclosure and engaged in misleading or deceptive conduct, breaching relevant provisions of the Corporations Act 2001 (Cth)," says Slater & Gordon.

The forecast reduction from 15-20 per cent to 5-10 per cent EBITS growth related to challenges in the US market, where not only had competitors been undercutting prices but TWE itself had suffered from unexpected leadership changes.

Unforeseen circumstances had meant meant Angus McPherson - who has been with the group for almost a decade - was unable to work in the US, and the company announced he would be replaced by Constellation Brands executive Ben Dollard.

These leadership troubles led to a "loss of execution momentum" through the first half with EBITS down 17 per cent - a trend that was expected to carry through to this half. 

S&G notes in August 2019 the group had stuck by its EBITS growth forecast of 15-20 per cent, and noted its FY20 EBITS result would be delivered by growth in all markets, through continued top line growth and premiumisation as well as ongoing operational efficiency.

As a result, S&G is making the claim for investors who purchased TWE shares between 15 August 2019 and 28 January 2020.

"We are currently investigating whether the Claim Period can be extended to commence at an earlier date, potentially back to the date that the EBITS Growth Representation was made," the law firm said.

Treasury Wine Estates confirms today it has been served with a group proceeding filed against TWE in the Supreme Court of Victoria.

"The proceeding has been filed by Slater + Gordon on behalf of the plaintiff, who brings the claim on behalf of shareholders who acquired an interest in TWE shares between 14 February 2019 and 28 January 2020," the company says.

"The statement of claim includes allegations of contraventions of the Corporations Act in relation to continuous disclosure and the Corporations Act and ASIC Act in relation to misleading or deceptive conduct.

"TWE strongly denies any and all allegations of wrongdoing and intends to vigorously defend the proceeding."

Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.

Business News Australia

Get our daily business news

Sign up to our free email news updates.

 
Whitefox Recruitment founder Luke Hemmings making strides as a careers leader
Partner Content
After relocating his Canberra-founded company Whitefox Recruitment to the Gold Coast la...
Whitefox Recruitment
Advertisement

Related Stories

ASIC secures its first court win for greenwashing against US giant Vanguard

ASIC secures its first court win for greenwashing against US giant Vanguard

The Australian corporate watchdog has caught out one of the world&r...

Medicinal cannabis group Althea shaves $1.5m from its cost base through staff cutbacks

Medicinal cannabis group Althea shaves $1.5m from its cost base through staff cutbacks

Australian-founded medicinal cannabis company Althea Group (ASX: AG...

Charter Hall snares 15pc stake in Hotel Property Investments for $97m from 360 Capital

Charter Hall snares 15pc stake in Hotel Property Investments for $97m from 360 Capital

Listed funds manager 360 Capital Group (ASX: TGP) has offloaded its...

Lendlease gains approval for $1.7b transformation of Queen Victoria Market precinct

Lendlease gains approval for $1.7b transformation of Queen Victoria Market precinct

Australian development giant Lendlease Group (ASX: LLC) has been gr...