Practice group leader Ben Phi said that the claim "is at an advanced stage", and relates to a profit downgrade made by the primary industries agent and supplier on 22 June.

That downgrade, which reported an expected underlying loss of between $8 million and $14 million for the year to September, was significantly lower than the expected after profit tax of $55.1 million the company forecast after it issued its Prospectus in September 2009.

The action by Slater & Gordon comes after Elders announced yesterday (4 November) that the Australian Securities and Investments Commission (ASIC) had concluded its inquiries into Elders profit downgrade and would not be taking any further action.

"It is our opinion, based on our independent investigations, that there is a reasonable basis to allege that Elders breached its continuous disclosure obligations by failing to disclose to the market prior to 22 June 2010 that it was increasingly unlikely to meet its profit forecast for the 2010 financial year," Phi said.

The proposed action by Slater & Gordon against Elders comes just one week after it launched a class action in the Supreme Court of Victoria against the German company Grunenthal.

Slater & Gordon and Peter Gordon, from Gordon Legal, are conducting the case on behalf of five Australian and New Zealand survivors of the drug thalidomide.

Grunenthal developed and sold thalidomide.

In late July, Peter Gordon and Slaters negotiated a $60 million settlement with the British company Diageo on behalf of 45 surviving thalidomide victims. Diageo had purchased Distllers, the distributors of thalidomide in Australia in the 1960s.

While the Diageo matter was negotiated pro bono, the class action against Grunenthal will be run on a commercial basis.