Downer EDI subsidiary Spotless has settled its investor class action out of court for $95 million.
Slater and Gordon filed the class action in May 2017 against Spotless Group Holdings Limited on behalf of investors who alleged they were deceived when the facility services company downgraded its FY16 guidance on 2 December 2015.
“A settlement sum of $95 million is a reflection that this case was meritorious and Spotless recognised it as such,” Slater and Gordon practice group leader, Emma Pelka-Caven said.
Downer said that the settlement was “without admission of liability” and the impact on its results for the 2020 financial year would be $35 million.
Pelka-Caven said the proceeding was less than six weeks away from going to hearing in the Federal Court.
The class action alleged Spotless had engaged in misleading and deceptive conduct when it provided its FY16 Guidance on 25 August 2015.
The lead applicant was small investor Alison Court of Hobart, a retired public servant, who claimed to have lost money when Spotless downgraded its FY16 guidance on 2 December 2015.
“This is a good outcome for all investors and should be a reminder that all listed companies owe duties to their shareholders to disclose relevant information. I am very pleased with the outcome,” Court said.
The class action was co-funded by litigation funders Therium Litigation Finance AF IC, ICP Capital Pty Ltd and Investor Claim Partner Pty Ltd.
The settlement is subject to court approval.
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