Rival law firm Maurice Blackburn Lawyers announced on Wednesday it was opening registrations to aggrieved shareholders wanting to pursue a class action.
Sydney-based firm ACA Lawyers is considering a separate class action against Slater and Gordon for potentially misleading the market over an $890 million shareholder raising to acquire Quindell’s professional services business in the UK, and profit forecasting for the 2016 financial year.
Maurice Blackburn’s class actions principal Jacob Varghese said the class action will be about the timeliness of the release of information on five occasions between April and December 2015.
“We wouldn’t take this step if we didn’t think there were serious questions to answer and shareholders don’t deserve a remedy,” Varghese told reporters.
“The decision has been made after long and serious consideration of the series of events that have plagued Slater and Gordon this year.”
Slater and Gordon has lost almost 90 per cent of its $2.75 billion market value on the Australian stock exchange since April, following its acquisition of Quindell for about $1.3 billion.
At the time, it said the acquisition would increase earnings per share by more than 30 per cent in the first year.
The company’s shares were lower on Wednesday, down 4.5 cents, or 4.6 per cent, to 93.5 cents at 11.45am (AEDT).
Shares in the company hit an all-time high of $8.07 in April before slumping to an all-time low of 59.5 cents in November over concerns about its UK business and revisions to its financial reports.
Slater and Gordon shares tumbled on Thursday last week after it dumped its earnings guidance for this financial year due to its UK business performing below expectations.
The $890 million April capital raising involved issuing shares to investors at $6.37 each.
Slater and Gordon is being investigated by the Australian Securities and Investments Commission after the firm said it had found errors in financial accounts.
Local News Matters
Media diversity is under threat in Australia – nowhere more so than in South Australia. The state needs more than one voice to guide it forward and you can help with a donation of any size to InDaily. Your contribution goes directly to helping our journalists uncover the facts. Please click below to help InDaily continue to uncover the facts.