Murray Goulburn Investor Class Action

This is a proposed class action by investors who purchased units in the MG Unit Trust in the period 29 May 2015 to 26 April 2016 (inclusive) (Relevant Period). Units in the MG Unit Trust trade on the ASX under the ticker code 'MGC'.

Cause of Action

Slater and Gordon has been engaged by aggrieved unitholders in the MG Unit Trust issued by the MG Responsible Entity Limited (MGRE) (ASX:MGC) to prepare a class action against Murray Goulburn Co-Operative Co. Limited (MG) and its subsidiary, MGRE (together, the MG entities).

The proposed claim will allege that the MG entities were responsible for misleading statements and/or omissions in a Product Disclosure Statement (PDS) issued by MGRE on 29 May 2015 and that the MG entities were responsible for MGRE breaching its continuous disclosure obligations under the Corporations Act 2001 (Cth) during the Relevant Period.

Persons who acquired units in the MG Unit Trust at any time prior to 27 April 2016, including pursuant to the offer contained in the PDS, and who suffered a loss as the result of acquiring those units are invited to participate in the claim by executing a Funding Agreement with IMF prior to the commencement of proceedings.

Further details about the proposed claim can be obtained by contacting IMF using the details below.

How much will it cost to be part of the class action?

The class action is being run on a no win - no pay basis, with all costs fully underwritten by IMF and Slater and Gordon. If you sign a funding agreement with IMF, you will not have to pay any fees unless the claims are successfully resolved. IMF will pay the other side's legal costs if the class action is unsuccessful.

Background to the class action

The claim relates to guidance provided by MGRE in its Product Disclosure Statement (PDS) issued on 29 May 2015 regarding MGC's likely revenue and profits from the sale of milk products during the financial year ending 30 June 2016 (FY16).

The PDS included a forecast that MG would achieve a FY16 net profit after tax (NPAT) attributable to Murray Goulburn shareholders and MGC unitholders of $85.8 million.

On 29 February 2016, Murray Goulburn announced a revised FY16 NPAT forecast of approximately $63 million, citing historically weak dairy commodity prices.

Then, on 27 April 2016, only two months before the end of the financial year, Murray Goulburn downgraded its FY16 NPAT forecast to $39 - $42 million (FY16 Downgrade). In announcing the FY16 Downgrade, Murray Goulburn blamed:

  1. Weak growth in Chinese demand for adult milk products in the first half of April 2016, resulting in reduced expectations for sales and revenue during the fourth quarter of FY16;
  2. A strengthening AUD:USD exchange rate; and
  3. A downward revaluation of milk product inventory expected to be sold in FY17.

That day, Murray Goulburn also confirmed that its CEO and Managing Director, Gary Helou, and its CFO, Brad Hingle, would resign from their positions.

In response to the news, MGC's unit price fell more than 40% from its prior closing price of $2.14 on 21 April 2016 to $1.26 per unit at close of trade on 27 April 2016.

The proposed claim will allege that:

  • the MG entities misled investors in MGC by issuing the FY16 profit forecast in the PDS and/or the revised forecast in February 2016, without a reasonable basis;
  • that the MG entities are responsible for breaches of continuous disclosure obligations under the ASX Listing Rules and the Corporations Act 2001 (Cth) by failing to announce the FY16 Downgrade, or any part of it, prior to 27 April 2016.

Current stage of case

Open to sign up; Pre-proceedings.

Is there a deadline to sign up to participate?

Yes. The sign up period closes on 19 July 2018.

Slater and Gordon plan to file the action on a ‘closed class basis’. This means that the class action will be brought only on behalf of eligible unitholders who enter into a litigation funding agreement with IMF prior to proceedings being issued.

If you wish to participate in the class action as a funded client of IMF, please ensure that you sign up below prior to 19 July 2018.

How do I sign up my claim?

To proceed to sign-up your claim as a funded client of IMF, you can do so by clicking on the "Sign Up" button below. Alternatively, you can contact the IMF Client Liaison Team by email on 403061@imf.com.au or free call 1800 016 464.