The Treasury Wine Estates Ltd (ASX: TWE) share price will be one to watch on Friday morning.
This follows an announcement by the wine giant which reveals that it has been hit with a class action.
What did Treasury Wine Estates announce?
This morning Treasury Wine Estates acknowledged that it has been served with a group proceeding filed against it in the Supreme Court of Victoria.
The proceeding has been filed by Slater & Gordon Limited (ASX: SGH) on behalf of the plaintiff, who brings the claim on behalf of shareholders that acquired an interest in the company's shares between February 14 2019 and January 28 2020.
According to the release, the statement of claim includes allegations of contraventions of the Corporations Act in relation to continuous disclosure and the Corporations Act and ASIC Act in relation to misleading or deceptive conduct.
The wine company strongly denies any and all allegations of wrongdoing and intends to vigorously defend the proceeding.
What is Treasury Wine Estates alleged to have done?
Slater & Gordon believes eligible shareholders may have claims against the company in relation to losses suffered following its announcement on January 28.
In this announcement the company revealed that its earnings before interest, tax, SGARA and material items (EBITS) growth was now expected to be 5% to 10% in FY 2020. This was driven partly by a sharp decline in profits for its Americas division.
The law firm notes that on October 16, the company reaffirmed the guidance it gave in August for growth in all markets in FY 2020. Yet by January the Americas business was underperforming expectations.
Based on this, the law firm believes "there is likely to be a reasonable basis to allege that TWE contravened its obligations of continuous disclosure and engaged in misleading or deceptive conduct, breaching relevant provisions of the Corporations Act 2001 (Cth)."
