Leading class action law firm, ACA Lawyers, has obtained funding to mount a class action against mining services firm WorleyParsons Limited (ASX:WOR), for withholding sensitive market information ahead of a 26 percent crash in its share price in November 2013.
More than $1.3 billion was wiped off the company’s market value following an earnings downgrade on 20 November 2013.
ACA Lawyers is currently continuing its due diligence on the action and expects to file a statement of claim on behalf of shareholders in the Federal Court before the end of the year.
In August 2013 WorleyParsons released its FY2013 annual report and provided guidance that earnings would increase in the 2013/14 financial year.
The WorleyParsons earnings downgrade came just six weeks after the company again told shareholders at its October 2013 AGM that earnings would increase in FY2014.
ACA Lawyers Principal Craig Allsopp said this is yet another example of a major public firm happy to spruik the good news but sweep the bad news under the carpet.
“The class action will allege that WorleyParsons shareholders suffered significant losses after the company failed to comply with its continuous disclosure obligations and engaged in misleading and deceptive conduct.
The class action will seek compensatory damages on behalf of WorleyParsons shareholders who acquired shares between 14 August 2013 and 19 November, 2013.”
In the legal proceedings shareholders will allege WorleyParsons had information by at least 14 August 2013 that deteriorating market conditions and project delays would materially impact its profitability in the financial year ending 30 June 2014.
Despite this, WorleyParsons did not reveal these problems and their impact until 20 November 2013.
“WorleyParsons is another example of a listed company pulling the wool over its shareholders’ eyes in an attempt to protect vested interests,” Mr Allsopp said.