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Shareholders lose out against Iluka in class action
In only the second Australian shareholder class action of its kind, shareholders have lost against resources company Iluka in the Federal Court.
Lauren Croft
After accusing Iluka resources of failing to inform shareholders of its inability to achieve sales forecasts and provide reliable forecasts for the 2012 calendar year, the Federal Court has dismissed all the applicants and group members’ claims against Iluka.
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The class action alleged that in the period from 12 April 2012 to 9 July 2012, Iluka should have been aware that it would not achieve its zircon and titanium dioxide sales forecasts for 2012. This information, had it been made public, would have a material effect on the price for Iluka shares.
It is further alleged that in the period from 12 April 2012 to 9 July 2012, Iluka misled or deceived its shareholders as to forecast zircon and titanium dioxide sales for 2012. The shareholders were represented by Shine Lawyers.
However, in Bonham v Iluka Resources Limited, the Honourable Justice Jagot found that Iluka had reasonable grounds for making and maintaining its 2012 sales guidance throughout the claim period and did not fail to disclose material information to the market. Her honour also found that the process by which the 2012 sales guidance was developed was reasonable, contrary to the applicant’s contention.
Herbert Smith Freehills represented Iluka, and the team was led by partners Jason Betts and Ante Golem. Mr Betts said it was a privilege to represent Iluka.
“We are pleased that the court dismissed the allegations and favourably received Iluka’s defence. It is a great credit to Iluka that it pushed forward with the proceeding and defended the case to trial, particularly given the enormous efforts involved in bringing together the evidence of its former senior leaders. We thank Iluka for its leadership and strategic focus in defending this claim,” he said.
Mr Golem added that this was an important milestone in Australia’s class actions history.
“The court’s decision represents only the second dismissal of a shareholder class action after a full trial, and we are proud to have represented Iluka. This class action was first filed four years ago in April 2018, following an application for preliminary discovery which was brought in 2014. The trial itself was heard over four weeks in March, April and May 2021,” he said.
“Jason and I are extremely proud of the work of Herbert Smith Freehills’ market leading class action team in Perth and Sydney, and are indebted to the lawyers, paralegals and support staff who assisted on this matter.
“Iluka is understandably pleased with the outcome after such a prolonged process and we congratulate them on this significant win.”
