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Maurice Blackburn has confirmed that a class action against Lendlease (ASX: LLC) will go ahead after filing an open class action in the New South Wales Supreme Court today.
The class action arises from alleged misleading behaviour from Lendlease who Maurice Blackburn say failed to adequately disclose the long-running problems affecting its engineering and services business.
Maurice Blackburn alleges that Lendlease's failures led to a single-day share price drop of 18 per cent in November 2018.
Class actions principal lawyer at Maurice Blackburn Rebecca Gilsenan alleges that the company certainly would have known about significant issues and changes before it informed the market of them.
"The market had been led to think that Lendlease had its business under control and there would be no more disappointments. And then there was another massive provision. Unsurprisingly, the market reacted sharply," says Gilsenan.
"Frankly, it is hard to believe that a company with the experience and sophistication of Lendlease wouldn't have been aware earlier of such significant financial problems within its business. But if Lendlease didn't know sooner, that is an even bigger problem as it would highlight to shareholders serious inadequacies of Lendlease's internal systems to properly manage a complex business."
Lendlease is yet to comment on the class action.
CLASS ACTION BACKGROUND
On 9 November 2018, Lendlease announced to the market that it had identified 'further underperformance' in its engineering and services business.
This announcement saw shares in the company dive more than 18 per cent in a single day.
The company reported a disappointing first half of the financial year in February 2019, with profit diving to $15.7 million from $425.6 million in the previous year.
This 96 per cent plummet led management to announce a reconsideration of the value Lendlease's underperforming engineering and services business.
The company determined the segment was "non-core" and no longer a required part of the group's strategy.
The total cost of the restructure of Lendlease will come between $450 million and $550 million before tax as a preliminary estimate.
Maurice Blackburn's proposed action will allege that Lendlease failed to comply with its continuous disclosure obligations under the Corporations Act 2001 (Cth) and the ASX Listing Rules and engaged in misleading and deceptive conduct in respect of the performance of its engineering and services business.
Since the first half results announcement the company has been awarded a lucrative Gold Coast Airport expansion project worth $370 million.
Lendlease will construct the hub's southern terminal expansion.
Shares in Lendlease are down 0.44 per cent to $12.32 per share at 10.58am AEDT.
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