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Maurice Blackburn serves Nufarm class action

Maurice Blackburn serves Nufarm class action

Class action law firm Maurice Blackburn has today served class action proceedings against agricultural company Nufarm. _x000D_

CLASS action law firm Maurice Blackburn has today served class action proceedings against agricultural company Nufarm. 

The firm's claim alleges the company breached its continuous disclosure obligations and engaged in misleading conduct for almost a year.

This comes as a class action is commenced against the company in the Victorian District Registry of the Federal Court of Australia by Slater & Gordon, which is acting for investors who acquired Nufarm shares between 2 march 2010 and 31 August 2010.  

The Maurice Blackburn class action claim, filed on 24 December 2010 with the Federal Court in Sydney, has almost doubled the claim period originally being investigated by the law firm.

Maurice Blackburn’s claim alleges that between 28 September 2009 and 31 August 2010 Nufarm did not adequately inform the market of the impact of the declining international glyphosate market on its business and profitability. Nufarm had issued three profit downgrades in the lead up to its 2009 Annual Report which disclosed that Nufarm had written down the value of its glyphosate stocks by some $40m at the end of the 2009 period. 

The first directions hearing in the case is in March, 2011 in Sydney.

Jason Geisker, senior associate said: “On 28 September 2009 Nufarm told the market that its glyphosate write downs in 2009 would enable the company to generate profits in2010, while selling glyphosate at market competitive prices. They did not.  Instead between August and December 2009 Nufarm elected to take further losses on its glyphosate stocks totaling some further $28.4m, which the company only announced on 2 March 2010.” 

“Our clients say they have lost confidence in Nufarm’s reporting systems and its ability to estimate results.  We believe that the problems at Nufarm go further back than the2 March 2010 forecasts. 

“This view is supported by ASIC’s investigation into Nufarm announced in December. Investors are only able to make informed decisions about their share purchases when listed companies adhere to their disclosure obligations.”

On 2 March 2010 Nufarm announced a $40m loss for the first half of 2010 and then set ambitious goals for the remainder of the 2010 year, predicting a return to profitability for its glyphosate business with near record gross profit margins. Maurice Blackburn’s claim alleges that Nufarm had no reasonable basis for making such ambitious forecasts and that its predictions about its glyphosate business mislead the market.”   

Nufarm’s 2 March2010 profit forecast was reaffirmed in late March 2010 and again in documents for its capital raising on 20 April 2010.  The company stated in 22 June2010 that it would continue to keep the forecasts under close review and inform the market if a different view had been formed.  The company then belatedly issued a shock 50% profit downgrade on 14 July 2010, to a net operating profit range of $55 - $65 million (excluding non-operating items),resulting in a 38% drop in share price by 19 July and further falls following disclosure of its additional debt and banking covenant breaches announced on 1 September 2010. 

The claim alsoalleges that from 11 February 2010 to 2 March 2010 Nufarm breached its continuous disclosure obligations by failing to inform the market of its likely poor first half-year result.  As a result of an investigation of this matter in December last year ASIC imposed a $66,000 fine and Nufarm gave enforceable undertakings to review its financial reporting procedures regarding continuous disclosure. 

This claim is being conducted as a class action by Maurice Blackburn on a no-win no-fee basis.

CLICK HERE for more on the Slater & Gordon class action. 

Like this story? Read more:

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Maurice Blackburn serves Nufarm class action
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