OZ Minerals has settled two shareholder class actions for $60 million which claimed the mining company failed to disclose its true debt position during the global financial crisis.
The company has agreed, conditionally, to settle a case lead by Maurice Blackburn for $35.9 million plus costs of $3.1 million, while the Slater & Gordon matter will settle for $19.2 million plus costs of $1.8 million.
Maurice Blackburn brought its claim against the company in late 2008 for breaching continuous disclosure laws. It alleged that the miner misled shareholders by failing to properly inform the market about its debt position.
Slater & Gordon, supported by Litigation Lending Services, acted for more than 8,400 participants who purchased shares in the minerals resources company, Oz Minerals, between February and December 2008.
In this case, subject to the settlement being approved by the Federal Court of Australia, the predominantly mum and dad retail investors will share $19.2 million, the firm said.
Approximately 80 per cent of class members who suffered a loss are expected to receive between $100 and $5,000 depending on when and the number of shares they purchased.
The Federal Court will respond to the settlement within the next eight weeks.
Ken Fowlie, practice group leader, Sydney commercial and project litigation at Slater & Gordon, said the settlement was a great win for small retail investors.
“Joining this sort of class action is almost always the only way small investors can have any chance of recovering compensation from well resourced big businesses,” Fowlie said.
“With this settlement today we see a perfect example of how a class action can resolve major legal battles quickly and cheaply for small investors with limited resources.”
Michelle Silvers, Managing Director of Litigation Lending Services, said the win would not have been possible without the backing of a litigation funder.
“It is this sort of class action that is increasingly holding big public companies across Australia accountable to shareholders,” Silvers said.
“Class actions supported by litigation funders are an affordable, effective and transparent way of achieving justice for small investors.”