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Blue Sky hit with 2nd class action
Blue Sky Alternative Investments’ shareholders have launched a second class action against the firm, following its administration in 2019.
Lauren Croft
The class action claim, filed by Shine Lawyers in the Federal Court of Australia on Monday (7 November), alleges that the company, two of its former directors, and the group’s former auditors, Ernst & Young, engaged in misleading or deceptive conduct, as well as breached accounting and auditing standards and breached the company’s continuous disclosure obligations.
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The statement of claim names former Blue Sky chief executive officer Robert Shand and former managing director John Kain as respondents in the case — and states that a number of financial year reports from the firm “did not give a true and fair view of the financial position and performance” of Blue Sky and were not in accordance with the Corporations Act.
This follows the launch of a similar class action, filed by Banton Group in the Federal Court in August, which accused Blue Sky of overstating the company’s financial performance and overstating its assets materially in financial reports to members and potential investors between 2016 and 2018.
The Brisbane-based investment firm was once valued at over $1 billion at its peak market capitalisation in 2017 — but the company’s value plummeted after it began to emerge in 2018 that Blue Sky may have overstated its financial performance and assets. By May 2019, Blue Sky was in administration.
Shine Class Actions practice leader Craig Allsopp said investors were left with worthless holdings when the company’s true financial position came to light.
“This was a catastrophic financial collapse which left hundreds of shareholders worse off,” he said.
“We’ll be looking to hold those responsible to account and try to recoup as much of the losses as we can.”
Anyone who purchased shares in Blue Sky Alternative Investments between 10 February 2017 and 20 May 2019 is eligible to join the class action.
