More than 250 investors in infant formula producer Bellamy’s Australia have registered with Victorian legal firm Maurice Blackburn to take part in a potential class action lawsuit, after the company’s share price plummeted by more than 40 per cent.
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Two other legal firms, Slater and Gordon and ACA Lawyers, also announced on Thursday that they would potentially take action on behalf of disgruntled shareholders.
Bellamy’s share price dropped dramatically on Friday, December 2 after a market update sparked a sell-off which wiped half a billion dollars off the company’s value.
The update indicated that the Launceston-based company had lost some market share to other brands, which chief executive Laura McBain said was due to a “temporary volume dislocation” in China ahead of regulatory changes.
Slater and Gordon Senior Class Actions Lawyer Mathew Chuk will alleged that Bellamy’s failed to properly disclose the company’s risks and challenges to the market.
“Bellamy’s had a reputation as a quality company selling quality product,” he said.
Mr Chuk said it will be alleged that “the company prioritised preserving that reputation at the expense of properly disclosing to investors the risks and challenges that the company was facing at home and in China.”
ACA Lawyers Senior Principal Bruce Clarke said the firm was strongly of the view that, subject to further investigations, there could be a potential shareholder claim against Bellamy’s.
“We believe that Bellamy’s has potentially failed to keep the market fully informed about its true financial position and that it has misled investors about its financial status,” he said.
Mr Clarke said ACA Lawyers was also investigating whether the organic group knew its problems stemmed from other factors such as supply chain and IT issues.
Class Action Principal at Maurice Blackburn Lawyers Ben Slade said the number of people registering online was “a sure sign that this massive price drop was a huge shock to investors.”
Ms McBain and Bellamy’s chairman Rob Woolley both sold shares in Bellamy’s Australia in mid-March for a combined total of $5.76 million.
Ms McBain sold 400,000 shares at $10.49 totaling nearly $4.2 million, while Mr Woolley sold 150,000 shares at $10.44 each, worth close to $1.57 million. Bellamy’s was contacted for comment.
The pair also made on-market trades on August 24, 25 and 26, worth a combined $5.32 million.
Ms McBain sold 165,000 shares at $14.547 each for a total of slightly more than $2.4 million and Mr Woolley sold 200,000 Bellamy’s shares at $14.60 each, raising $2.92 million.
Bellamy’s were contacted for comment.
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Holly Monery
Holly Monery is a journalist for The Examiner newspaper, based in Launceston, Tasmania. Her main area of focus is local government.
Holly Monery is a journalist for The Examiner newspaper, based in Launceston, Tasmania. Her main area of focus is local government.
