Legal Eagles Look To Pounce On Vocus In Class Action Plan
Ever on the prowl to right a few wrongs and perhaps bank a potential million or two, leading law firm Slater and Gordon has joined forces with Investor Claim Partners, described as a “shareholder claim management provider”, to set up a potentially huge class action against Australia’s No 4 telco, Vocus.
S&G has said that the proposed claim will be brought by “potentially thousands of people who purchased Vocus shares between November 29, 2016 and May 2, 2017”.
The legal eagles allege that Vocus shares traded at prices significantly higher than their true value during that period.
Vocus’s preliminary financial results for the 2017 financial year ended August, showed a net profit after tax that was allegedly $152.3 million below the company’s previous guidance. And for the full 2017 financial year, Vocus eventually posted a loss of $1.46 billion.
Said Slater and Gordon principal lawyer Matthew Chuk yesterday: “Our investigations to date suggest Vocus had unreasonable expectations about the costs involved in integrating its newly-acquired platforms and technology systems.
“The company expanded significantly since 2015 by acquiring other businesses such as Amcom and Nextgen Networks, as well as merging with M2 Group.
“When Vocus issued its FY17 guidance, it stated that it expected to gain efficiencies by bringing these businesses together, but we allege this was done without proper visibility of profitability.
“We have also identified an accounting issue relating to recognition of ongoing costs associated with the execution of long term, multimillion-dollar service contracts.”
Responding to notification of the class action, Vocus yesterday said: “At all times, Vocus has complied with its continuous disclosure obligations and will continue to do so.”