Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

Shareholders sue Australia's QBE over shock profit downgrade

Published 09/09/2015, 12:47 pm
© Reuters.  Shareholders sue Australia's QBE over shock profit downgrade
AXJO
-
QBE
-

SYDNEY, Sept 9 (Reuters) - Shareholders launched a class action lawsuit on Wednesday against QBE Insurance Group QBE.AX , Australia's biggest insurer by premium income, over a 2013 profit downgrade that wiped $2.82 billion off its market value in a single day.

Law firm Maurice Blackburn said it had filed a case on behalf of almost 700 clients in the federal court in Melbourne seeking to recover more than A$200 million ($141.06 million) in compensation from QBE for "shares purchased at inflated prices."

QBE stunned the market in December 2013 when it announced it was expecting to post a loss of $250 million for fiscal year 2013 due to writedowns and unexpectedly large claims. Analysts had expected a profit in excess of $1 billion.

The downgrade sent QBE shares plunging over 20 percent that day.

"We have been approached by shareholders concerned that QBE was less than frank and timely in informing the market," Maurice Blackburn class actions principal Jacob Varghese said in a statement.

QBE declined to comment on the lawsuit.

The lead plaintiff is Richard Bungey, a 69-year-old semi-retired small-business owner who bought 1,300 QBE shares months before the price collapse.

Last month, QBE posted a 24 percent rise in first-half net profit and lifted its 2015 interim dividend by 33 percent to 20 Australian cents a share. ID:nL3N10S5G6

Shares in QBE, valued by the market at A$17.5 billion, have risen about 19 percent year-to-date, and are on track for their best performance since 2007. The broader S&P/ASX 200 index .AXJO is down nearly 4 percent this year. ($1 = 1.4178 Australian dollars)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.