SLATER AND GORDON INVESTIGATES CLASS ACTION AGAINST BELLAMY'S

Written on the 15 December 2016

SLATER AND GORDON INVESTIGATES CLASS ACTION AGAINST BELLAMY'S

SLATER and Gordon and litigation funder IMF Bentham Limited are one of three teams investigating a claim against Bellamy's Australia (ASX:BAL) on behalf of investors who acquired shares in the company between 14 April 2016 and 9 December 2016.

Maurice Blackburn and ALA Lawyers are also investigating the circumstances behind Bellamy's $500 million sharemarket plunge.

Bellamy's shares fell by approximately 45 per cent in reaction to a 2 December 2016 announcement that:

  • Sales were falling well below internal and market expectations;
  • Regulatory reform in China was causing "temporary volume dislocation"; and,
  • EBIT margins were declining.

Slater and Gordon Senior Class Actions Lawyer Mathew Chuk says initial investigations suggest Bellamy's failed to properly disclose the company's risks and challenges to the market.

"Bellamy's had a reputation as a quality company selling quality product," says Chuk.

"Our investigations to date suggest that the company prioritised preserving that reputation at the expense of properly disclosing to investors the risks and challenges that the company was facing at home and in China."

"Furthermore, we are investigating whether Bellamy's repeated statements to the market since April 2016 regarding its likely performance in China had the effect of misleading shareholders."

IMF Investment Manager Simon Dluzniak says losses experienced by Bellamy's shareholders have been significant.

"The market's reaction to the announcement made two weeks ago was severe and shareholders are understandably nervous about the company's next announcement," says Dluzniak.

"Investors will have lost hundreds of millions of dollars from purchasing Bellamy's shares in a potentially misinformed market.

"We are investigating whether a class action is a viable option to recoup those losses."

Bellamy's has not responded to the threat of a class action and its shares remain suspended as it prepares a report to the ASX regarding its disclosures to the stock market.

 

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