Nufarm – the Australian herbicide maker that grew out of former New Zealand fertiliser group Fernz Corp – says it will vigorously defend a class action by shareholders alleging the company engaged in misleading conduct relating to its full year result for the 2009/10 financial year.
The shareholders allege a profit forecast on March 2 of $A110 million to $A130 million for the 2010 fiscal year was deceptive.
On July 14, Nufarm issued a revised forecast net operating profit of between $A55 million and $A65 million.
Nufarm blamed poor weather and low demand for the downgraded forecast.
Nufarm shares fell more than 30% following the downgrade.
The group lawsuit was filed on behalf of Australian and international institutional and retail shareholders, including New Zealanders.
The shareholders are represented by law firm Slater and Gordon, and the proposed class action is funded by Comprehensive Legal Funding.
“By failing to revise its profit guidance until 14 July 2010, it is alleged that Nufarm breached its continuous disclosure obligations,” Ben Phi, practice group leader at Slater & Gordon, said in a statement.
Nufarm denied any wrongdoing in a statement to the Australian Stock Exchange today.
Nufarm, Australia’s biggest agriculture chemicals supplier, says the applicants, who include people who purchased shares between March 2 and August 31, 2010, are seeking unspecified and unquantified damages.
"Nufarm denies any and all allegations of wrongdoing, and will defend the proceedings vigorously," the company said in a statement.