SUPREME COURT GRANTS LEAVE FOR CLASS ACTION AGAINST DICK SMITH
Written on the 25 July 2017 by David Simmons
A CLASS action law suit against Dick Smith has been given the green light for shareholders impacted by the company's fall from grace.
The Supreme Court of NSW granted leave to Bannister Law to file a class action against DSHE Holdings Ltd, formerly known as Dick Smith Holdings Ltd.
As Dick Smith is in liquidation, leave had to be granted by the NSW Supreme Court before the class action could commence.
Principal of Bannister Law, Charles Bannister, says the Supreme Court ruling is already a win for ex-Dick Smith shareholders.
"Thousands of shareholders have lost tens of millions because, we allege, DSHE contravened provisions of the Corporations Act, including by engaging in misleading or deceptive conduct on various occasions throughout 2015 in relation to DSHE shares," says Bannister.
The widely-publicised demise of Dick Smith saw the company collapse in 2015, just two years after first listing on the Australian Stock Exchange.
Several controversies, including the shock resignation of CEO Nick Abboud, the revelation that employees were underpaid by $2 million over six years, and the failure of receivers to secure a potential buyer led to shareholders feeling worse for wear following the collapse.
Australian online electronics retailer, Kogan.com, stepped in at the last minute to acquire Dick Smith's online business which it currently operates today.
In March this year it was announced that eight former leaders of the company are being sued in connection with the collapse of the electronics chain which left $400 million owing to creditors.
The class action law suit brought by Bannister Law alleges Dick Smith's financial statements released in 2015 were misleading and deceptive.
Shareholders claim that during 2015 the share price was inflated because of the misleading and deceptive statements and that they have suffered loss and damage as a result.
"We already have hundreds of registrants whom purchased shares within the relevant period of 16 February 2016 to 31 December 2015 and suffered loss due to the alleged misconduct of DSHE," says Bannister.
"The Court's ruling today is great news for those shareholders. Had the Court denied leave, our case was over before it really began."
Author: David Simmons