TWE faces investor class action9th July, 2014 by Rupert Millar
Treasury Wine Estates is facing class action from its investors following an impairment of AU$19 million it made last year.
According to the Australian Broadcasting Corporation, Treasury is facing a backlash from its investors over the destruction of some six million bottles of old wine in the US.
Maurice Blackburn lawyers who are representing the class action allege that: “TWE misled the market and breached its continuous disclosure obligations in relation to the financial impact of over-stocked US distributors.”
Principal Rebecca Gilsenan said: “This action is being brought on behalf of hundreds of TWE shareholders, who lost millions of dollars when the company revealed the full extent of the problem in July last year.
“Our case will present evidence that TWE knew, or should have known, by 17 August 2012 that large writedowns were inevitable and as such, the market should have been apprised of this far earlier.”
“It wasn’t informed until July 2013, so shareholders unfairly paid an inflated price for the stock in the meantime.”
TWE has denied the allegations and said it will “vigorously” defend itself.
The lawsuit is an added blow to TWE which is struggling to bring itself back into profit.
The end of last year and all of this year have so far yielded little but woe for the maker of Penfolds and Wolf Blass, with plunging profits, takeover rumours and multi-million dollar impairments predicted.
So far TWE has cut jobs at the company and brought non-wine trade figures into a number of senior positions, including the CEO and the new managing director of Asia, Europe, the Middle East and Africa.
The lawsuit was first filed in late autumn last year.