Supply-chain logistics company Brambles Limited (ASX: BXB) has stated that is will defend allegations of misleading and deceiving shareholders in relation to its FY17 guidance.
Brambles shareholders, represented by law firm Slater & Gordon Limited (ASX: SGH) and supported by litigation funder IMF Bentham Ltd (ASX: IMF), claim that Brambles knowingly provided the market with false information when Brambles released its FY16 results and provided guidance for its FY17 financial performance on 18 August 2016.
Brambles reiterated its FY17 guidance at its first quarter trading update in October 2016 and again in November 2016 at its AGM, according to a statement released by IMF Bentham.
But Brambles changed its tune soon after.
"In a series of announcements released to the ASX on 23 January 2017 and 20 February 2017, Brambles withdrew the FY17 Guidance," IMF Bentham stated.
"The market responded with falls in Brambles' share price of 15.8% and 10% on 23 January and 20 February 2017, respectively."
Prior to the falls, Brambles shares were trading for up to $12.62 in mid-January but had tumbled to about $9.04 by mid-March.
Brambles shares are currently trading for around $9.78, still well short of the highs shareholders enjoyed at the start of 2017.
"It will be alleged that Brambles ultimately attributed the FY17 Downgrade to factors which it was, or should have been, aware of at the time it issued the FY17 Guidance in August 2016, which were not disclosed to the market at that time or at any time until later in 2017," IMF Bentham stated.
The proceedings apply to shareholders who acquired an interest in Brambles between 18 August 2016 and 17 February 2017.
Brambles has denied the allegations.
"Brambles strongly believes that it has at all times complied with its continuous disclosure, Corporations Act and other regulatory obligations and will therefore vigorously defend the proceedings brought against it," the company stated.
