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Shareholder class action filed against vehicle leasing company
Allegations a vehicle leasing company made non-disclosures and misstatements to the market will be the subject of a new class action.
Naomi Neilson
Phi Finney McDonald filed the class action in the Victorian Supreme Court on behalf of FleetPartners shareholders, formerly Eclipx Group (ECX), a vehicle leasing provider based in Sydney, Brisbane, and Melbourne.
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The class action alleges ECX engaged in “misleading and deceptive conduct” and breached its continuous disclosure obligations by making representations and failing to disclose certain information relating to the company’s financial year earnings in 2017, 2018 and 2019.
On 20 March 2019, ECX announced it had withdrawn the company’s financial year earning guidance for the 2019 financial year and declined to provide an updated earning guidance.
The company also indicated it was unlikely to proceed with a proposed merger with competitor McMillan Shakespeare.
Phi Finney McDonald submitted ECX’s share price dropped 47 per cent between market close on 15 March, the day of the announcement, and 20 March, when the trading halt had been lifted.
On 31 May and 13 November 2019, financial results for the 2017 and 20818 financial years were restated, including a $9.5 million reduction in trade receivable in its “Right2Drive” business resulting from revenue recognition issues.
“We allege the company’s financial results and earnings guidance during the claim period were based upon excessive revenue recognition in the company’s Right2Drive business and unreasonable expectations as to the integration and future performance of both the Right2Drive and Grays businesses within the group,” principal lawyer Denée Muller said.
The class action is seeking compensation for shareholders who acquired shares or an interest in shares during the period of 8 November 2017 to 10.35am on 20 March 2019.
