LEGAL class action against Murray Goulburn is “not of much use” to dairy farmers, according to a former director of the milk co-operative.
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Kergunyah dairy farmer Lindsay Jarvis was commenting after legal firm Slater and Gordon announced it had lodged a claim in the Federal Court.
The action is on behalf of those who invested in Murray Goulburn’s listed entity MG Unit Trust from May 29 2015 to April 26 2016, including those who replied to an initial public offering in 2015.
Slater and Gordon argues the firm misled investors with profit forecasts and failed to meet market disclosure duties by not announcing a downgrade in 2016.
Murray Goulburn Co-operative and MG Responsible Entity, the bodies with oversight of the unit trust, responded to the lodging with a statement declaring they “intend to defend the proceeding”.
Slater and Gordon senior lawyer Andrew Paull said investors party to the claim comprise institutions, those with self-managed superannuation funds and farmers, including some from the North East of Victoria.
“We wouldn’t take it on if we didn’t think there was a good chance of success,” Mr Paull said.
“This looks like a strong case, all the evidence that has come out not just publicly, but with court cases with ASIC and the ACCC point to that.”
However, Mr Jarvis, who was a Murray Goulburn director for 23 years until 2008, said he was not personally aware of any North East farmer involved in the class action.
“The majority of people think that the class action people are trying to get an advantage over the ordinary shareholders and what you’ve got in this part of the world is a majority of ordinary shareholders,” Mr Jarvis said.
“I doubt there’s a lot that have joined the class action.
“There was a bit of a press to say ‘you’ll make some money, you’ll get $2 or $3 a share’, compared to the $1 that old issues were issued at.
“Anybody that read the prospectus clearly saw it said shares could go from $2 to 65 cents, so if you’ve invested and it goes to 65 cents what right have you got to complain about it, when it’s now $1.30.
“This action really is not of much use for those interested from the dairy farmers’ point of view, it’s only for the ones that invested late in the scene and tried to get a higher advantage by investing in a $1 a share to get $2.50.
“I don’t think there’s too many in this area that fit into that category.”
Mr Jarvis said most of those hit by the collapse of Murray Goulburn would prefer to have harsh legal action taken against the executives who oversaw the demise of the co-operative which processed milk at Kiewa.
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