Investors were unable to make informed decisions
A2 Milk Co Ltd is facing a third class action lawsuit from shareholders who claim they suffered losses over a nine-month period that ended in May last year because the dairy products manufacturer failed to forecast its earnings correctly, reported Reuters.
In a proposed class action filed in the Auckland High Court, lawyers for the investors said a2 Milk “issued misleading guidance and failed to amend or withdraw it in a timely manner,” leading to sharp losses.
In that period, which spanned 19 August 2020, to 9 May 2021, the company issued multiple earnings downgrades that wiped off nearly two-thirds of its market value.
“Because of the inaccurate information given to the market, investors were unable to make informed decisions as to whether to buy, sell or retain a2 Milk shares,” said Philip Skelton QC, one of the lawyers leading the claim.
A2 Milk has over the past few months been served with two other class action proceedings with similar allegations.
The company said on Wednesday it has always complied with its disclosure obligations and would vigorously defend the proceedings.