Troubled infant formula manufacturer Bellamy’s Australia, which saw its CEO replaced earlier this month amid forecasts of a steep decline in annual profits, is facing two proposed class-action lawsuits from investors.
In a release to the Australian Securities Exchange, Sydney-based litigation funder IMF Bentham said today (23 January it proposed to fund claims of “certain current and former shareholders” of Bellamy’s over alleged misleading or deceptive conduct and an alleged breach by the company of disclosure obligations in relation to trading prospects and future earnings performance between 14 April and 9 December 2016.
In a separate statement, Australian class action firm Maurice Blackburn said it is also investigating a claim against Bellamy’s over alleged breaches of disclosure obligations “and for allegedly engaging in misleading or deceptive conduct regarding its infant formula trade with China”.
Maurice Blackburn said: “If Bellamy’s knew, or ought to have known, about the expected impact of Chinese regulatory changes on its operations and failed to adequately disclose this information, then investors who bought Bellamy’s shares may have paid too much and could be entitled to compensation.”
Bellamy’s requested a halt in the trading of shares last month and asked for the halt to be extended later in the month until it determined the impact talks with “key supplier/manufacturers” would have on its financial results. Shares resumed trading on 11 January, the day on which Bellamy’s provided an update on its trading on the departure of CEO Laura McBain.
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Earlier this month, Bellamy’s largest single shareholder, the Black Prince Private Foundation, said it was pushing for the replacement of four of the company’s non-executive directors with its own candidates.
Meanwhile, Bellamy’s chairman Rob Woolley has confirmed an annual general meeting to vote on Black Prince’s proposed shake-up of the board will be held on 28 February in Melbourne. Woolley said Bellamy’s board is recommending shareholders to vote against the Black Prince proposals. He claimed Bellamy’s had “not been able to definitively ascertain who controls Black Prince”.