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Australia's Murray Goulburn faces shareholder legal action

Published 17/05/2016, 09:46 am
Australia's Murray Goulburn faces shareholder legal action
MGC
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SYDNEY, May 17 (Reuters) - Murray Goulburn Co-operative Co Ltd MGC.AX said on Tuesday a class action lawsuit had been filled against it for allegedly misleading shareholders before its partial 2015 listing.

The legal action against Murray Goulburn's current and former directors alleges the dairy processor was aware that information given to shareholders before the listing was potentially inaccurate.

The legal action also alleges the company did not inform the market soon enough about a likely profit shortfall.

Murray Goulburn denies any wrongdoing.

Murray Goulburn late last month slashed its full-year net profit forecast to between A$39 million and A$42 million ($30.2 million and $32.5 million), less than half the $85.8 million it forecast in an Initial Public Offering prospectus. milk prices have tumbled 60 percent since early 2014, due to a global supply glut, though Murray Goulburn had hoped its strategy of producing high-valued products would shelter it from the downturn.

Australia's largest dairy processor is already facing regulatory scrutiny. The Australian Competition and Consumer Commission said last week it is examining the timing and notice of the cuts, exposing Murray Goulburn to fines of A$1.1 million ($801,350.00) if found guilty of misleading conduct or elements of unconscionable conduct.

Murray Goulburn completed its partial IPO in May 2015, raising A$500 million. It kept its co-operative structure but would allow external investors to buy non-voting shares via a unit trust listed on the Australian Securities Exchange (ASX). ($1 = 1.3727 Australian dollars)

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