SHINE CORPORATE LTD FACES CLASS ACTION OVER $250M SHARE PRICE WIPEOUT

SHINE CORPORATE LTD FACES CLASS ACTION OVER $250M SHARE PRICE WIPEOUT

LISTED law firm Shine Corporate (ASX: SHJ) will face a class action from aggrieved shareholders after its shares plummeted 73 per cent following a 10-day suspension from trade in 2016.

The class action, filed in the Supreme Court of Queensland, alleges that Shine misled investors in a series of representations it made to the market in respect of its FY2014 and FY2015 results, in contravention of the obligations it owed under the Corporations Act 2001 and ASX Listing Rules.

On 29 January 2016, the value of Shine shares fell 73 per cent following the suspension from trade for "provisioning and business reviews". Its updated market guidance saw its forecast FY16 earnings slashed by half, from $54 million to $26 million which wiped out more than $250 million of market capitalisation.

Quinn Emanuel Urquhart & Sullivan (QE) have filed the class action and are backed by US litigation funder, Regency Funding and will represent shareholders who acquired shares in Shin between 27 August 2014 and 29 January 2016.

The class action contends that Shine knew, or ought to have known, prior to its trading halt in January 2016 that discrepancies in its work in progress recovery rates, coupled with other related "business factors", such as "sub-optimalfee earners", "legislative reforms" and "market competition" would likely have a material impact on its FY2016 results and accordingly, should have been disclosed to the market.

"Shine claims to be 'always standing up for the little guy.' But, its shareholders are the very 'everyday Australians' it claims to protect," Damian Scattini, a Partner at QE says.

"It is ironic that a law firm, which claims to specialise in class actions, would mislead its own investors."

In a statement to the ASX, Shine says it will "vigourously" defend the claim. At around 12.30pm (AEST) SHJ shares were trading down two per cent to $0.695

 

Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.

Business News Australia

Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

A game changer? Aspiring to the new standard on workplace mental health
Partner Content
Work health and safety regulators have been more active in the area of mental health ri...
Aon
Advertisement

Related Stories

Cyborg Dynamics Engineering secures $3.3m deal for Australia-first unmanned ground vehicle

Cyborg Dynamics Engineering secures $3.3m deal for Australia-first unmanned ground vehicle

Brisbane-based robotics and AI company Cyborg Dynamics Engineering ...

NSW eases border restrictions with ACT and Queensland

NSW eases border restrictions with ACT and Queensland

As the Australian Capital Territory leaves lockdown today and Queen...

Pfizer jab closer to approval for children, IDT to make new Monash vaccine

Pfizer jab closer to approval for children, IDT to make new Monash vaccine

Australian children aged five to 11 years of age could receive Pfiz...

Toll workers secure “industry first” superannuation and job security offer

Toll workers secure “industry first” superannuation and job security offer

UPDATE (11.04AM AEDT 14 October): Toll has issued a statement ...