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| Slater & Gordon targeted by aggrieved investors for potential class action | |
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| Slater & Gordon, the Australian law firm brought low by a clampdown on whiplash claims in Britain and its purchase of the scandal-hit UK insurer Quindell, faces further problems after being targeted for possible class actions on behalf of aggrieved investors. | Slater & Gordon, the Australian law firm brought low by a clampdown on whiplash claims in Britain and its purchase of the scandal-hit UK insurer Quindell, faces further problems after being targeted for possible class actions on behalf of aggrieved investors. |
| The Sydney-based legal firm ACA Lawyers said it had finalised a funding agreement that would allow claimants to recover the money they have lost on buying shares in Slater & Gordon. A rival law firm, Maurice Blackburn Lawyers, has opened registrations to shareholders aggrieved over the company’s performance and share price losses. | The Sydney-based legal firm ACA Lawyers said it had finalised a funding agreement that would allow claimants to recover the money they have lost on buying shares in Slater & Gordon. A rival law firm, Maurice Blackburn Lawyers, has opened registrations to shareholders aggrieved over the company’s performance and share price losses. |
| The firm found itself embroiled in scandal after its purchase of Quindell in March last year. Shares in the insurer were suspended in June and the Serious Fraud Office opened an investigation in August. | The firm found itself embroiled in scandal after its purchase of Quindell in March last year. Shares in the insurer were suspended in June and the Serious Fraud Office opened an investigation in August. |
| Bruce Clarke, principal with ACA Lawyers, said investors have many questions about the UK acquisition. “The directors have a lot of explaining to do. It was only in November shareholders and the market were being told the company was in good shape. Now three months later there are massive losses and writedowns. | Bruce Clarke, principal with ACA Lawyers, said investors have many questions about the UK acquisition. “The directors have a lot of explaining to do. It was only in November shareholders and the market were being told the company was in good shape. Now three months later there are massive losses and writedowns. |
| “It is not only institutional investors who have been burnt. Mum and dad investors and the company’s own staff took up shares in the rights issue in reliance on what the company said. It now looks like they have done with their money.” | “It is not only institutional investors who have been burnt. Mum and dad investors and the company’s own staff took up shares in the rights issue in reliance on what the company said. It now looks like they have done with their money.” |
| Slater & Gordon, which has 3,800 employees in the UK, has reported a AUS$958m (£494m) net loss for the six months, due primarily to the large writedown in the value of its UK business. It emerged during a conference call with analysts that Andrew Grech, the group’s chief executive, offered to resign. Last week, the shares fell after the interim results were delayed until Monday . | Slater & Gordon, which has 3,800 employees in the UK, has reported a AUS$958m (£494m) net loss for the six months, due primarily to the large writedown in the value of its UK business. It emerged during a conference call with analysts that Andrew Grech, the group’s chief executive, offered to resign. Last week, the shares fell after the interim results were delayed until Monday . |
| “Clearly today’s results are very disappointing. In particular the decline in business performance in the UK is of serious concern to all at Slater & Gordon and equally will be of concern to our investors,” Grech said. “We will therefore be taking a number of necessary and significant steps to improve the operational performance of both the UK business and the broader Slater & Gordon group.” | “Clearly today’s results are very disappointing. In particular the decline in business performance in the UK is of serious concern to all at Slater & Gordon and equally will be of concern to our investors,” Grech said. “We will therefore be taking a number of necessary and significant steps to improve the operational performance of both the UK business and the broader Slater & Gordon group.” |
| The firm said it had agreed to produce an operating plan and restructuring proposal by the end of April. | The firm said it had agreed to produce an operating plan and restructuring proposal by the end of April. |
| Slater & Gordon bought the professional services arm of Quindell for £673m in a transaction partly financed by an equity capital raising. It renamed the company Watchstone. | Slater & Gordon bought the professional services arm of Quindell for £673m in a transaction partly financed by an equity capital raising. It renamed the company Watchstone. |
| Clarke said there was “a wide net for recoverability” for actions of this type, with company advisers and insurers potentially in the line of fire if a claim were to be successful. He said there had been a significant number of successful cases in Australia. | Clarke said there was “a wide net for recoverability” for actions of this type, with company advisers and insurers potentially in the line of fire if a claim were to be successful. He said there had been a significant number of successful cases in Australia. |