Class action proposed against Murray Goulburn

Milk processor Murray Goulburn is facing a battle on the legal front, with the prospect of a class action against it.

Milk processor Murray Goulburn is facing a battle on the legal front, with the prospect of a class action against it.

MULTINATIONAL law firm Slater and Gordon and litigation funder IMF Bentham Ltd have formally opened registrations for a class action against Murray Goulburn Co-operative Co Limited and its subsidiary, MG Responsible Entity Limited.

The proposed claim is open to current and former investors who acquired units in Murray Goulburn’s listed entity MG Unit Trust between May 29, 2015 and April 26, 2016, including through the initial public offering in 2015.

Slater and Gordon senior associate Andrew Paull said registrations for unit holders would be open until May 18, with formal proceedings expected to be filed soon after that date subject to sufficient interest.

“Thorough analysis of the recent ACCC and ASIC inquiries into Murray Goulburn have strengthened our initial findings that suggest the company misled the market by forecasting profits it could never have achieved in the 2016 financial year,” Mr Paull claimed.

“We have identified significant inconsistencies between Murray Goulburn’s statements to the market regarding its likely revenue and profits that year, and the information available to the company’s management internally.

“As a result, we now have increased confidence the 27 April 2016 profit downgrade was the result of an overly optimistic forecast, rather than any factors beyond its control.”

The proposed claim will centre around these allegations.

Once sufficient participants have joined the action, it will be funded by IMF Bentham, and participants will not be required to pay any fees unless the class action is successful.

Unit holders who acquired units in the MG Unit Trust at any time between May 29, 2015 and April 26, 2016 and who suffered a loss as the result of acquiring those units can register their interest in the class action by visiting www.imf.com.au/mgc.

On Monday, Murray Goulbourn Co-operative Co. Limited and MG Responsible Entity Limited, as the responsible entity of the MG Unit Trust, released a media statement noting that “no such action has been commenced”.

Last week MG shareholders voted overwhelmingly in favour of selling its operating assets and liabilities to Canadian dairy giant Saputo.

The sale is expected to be concluded on May 1, with investors receiving 80 cents a share or unit on May 15.

Murray Goulburn has retained about $235 million from the sale, with $195 million set aside for potential retained litigation costs.

Gippsland Senior
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