SLATER AND GORDON (ASX:SGH), with funding from IMF Bentham (ASX:IMF), has filed its class action against Bellamy's Organic (ASX:BAL) in the Federal Court of Australia.
The action was filed on behalf of all investors who acquired shares in the company between 14 April 2016 and 9 December 2016.
It alleges that Bellamy's made misleading statements to the market about its growth strategy in China and also failed to keep the market informed about its declining market share in Australia during 2016.
Bellamy's says it will vigorously defend the case, which is the first of a mooted three actions being prepared against the company - there are a further two from Maurice Blackburn and ACA Lawyers in the pipeline.
Slater and Gordon senior class action lawyer Mathew Chuk says the firm has received a significant response from aggrieved Bellamy's investors.
"Hundreds of investors have now signed up with our class action after each of them saw the value of their Bellamy's shareholdings plummet," says Chuk.
"Mum and dad investors placed their faith in the Bellamy's story and have been horrified by the revelations of the past few months.
"Our investigation has confirmed our initial view that Bellamy's made misleading statements about its continuing growth in circumstances where it had no proper basis to do so, particularly given the likely impact of regulatory reform in China.
"More and more aggrieved shareholders are registering for this class action every day and the commencement of proceedings today is a significant step towards recovery of their losses."
IMF Bentham Investment Manager Simon Dluzniak says shareholders' potential losses will be in the tens or hundreds of millions.
"The market was clearly shocked by the recent announcements made by Bellamy's in relation to its trading performance in Australia and China and also regarding its anticipated trading performance for the FY17 year," says Dluzniak.
"It is important shareholders large and small have the ability to hold companies to account and, in funding this action, IMF provides a mechanism for them to do so."
The class action is funded by IMF Bentham and participants will not be required to pay any fees unless the class action is successful.
Business News Australia
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