Shareholders launch multi-million dollar class action against MAH

Published 11-NOV-2015 12:25 P.M.

|

3 minute read

Hey! Looks like you have stumbled on the section of our website where we have archived articles from our old business model.

In 2019 the original founding team returned to run Next Investors, we changed our business model to only write about stocks we carefully research and are invested in for the long term.

The below articles were written under our previous business model. We have kept these articles online here for your reference.

Our new mission is to build a high performing ASX micro cap investment portfolio and share our research, analysis and investment strategy with our readers.


Click Here to View Latest Articles

A class action lawsuit has been launched against Macmahaon Holdings (ASX:MAH) by ACA Lawyers on behalf of shareholders alleging the troubled mining contractor failed to disclose market sensitive information in 2012 about the impact of delays in one of its biggest West Australian mining infrastructure projects.

It’s a timely warning for all in the mining sector to cross their Ts.

The claim alleges Macmahon Holdings breached its continuous disclosure obligations and engaged in misleading and deceptive conduct by failing to reveal the financial impact of delays on its Hope Downs 4 – Rail Earthworks and Bridge Construction project (HD4), part of Rio Tinto’s 333 expansion program in the Pilbara.

ACA Lawyers’ Principal, Steven Lewis, said retail and institutional shareholders are alleging Macmahon should have told the market about project delays and the financial consequences at least four months before it actually did in September 2012.

“People who purchased Macmahon shares between 2 May 2012 and 18 September 2012 have paid too much as a result of Macmahon’s alleged failure to keep the market fully informed of the financial impact of the delayed project,” Mr Lewis said.

“Macmahon let down investors by not making timely disclosure of the financial impact of the delays and shareholders are understandably angry.

“That the CEO and the Western Australian manager resigned and the HD4 management team was changed speaks volumes about the problem. Unfortunately, it was the Macmahon shareholders who also suffered.

“The class action is an opportunity for these shareholders to recover losses caused by Macmahon Holdings’ alleged misleading and deceptive conduct,” Mr Lewis said.

The class action is open to all current or former Macmahon Holdings shareholders who acquired shares between 2 May 2012 and 18 September 2012.

Timeline

On 4 July 2011 Macmahon Holdings announced it had been awarded the HD4 project, with work to start in October 2011 and a scheduled completion during August 2012.

On 2 May 2012 Macmahon Holdings told investors that work had commenced on the HD4 project.

On 15 May 2012 Macmahon Holdings announced that it was accelerating works to complete the project by October 2012.

On 20 August 2012, Macmahon Holdings announced record profits for the 2012 financial year and forecast 20 per cent growth for the 2013 financial year, equating to a Net Profit After Tax (NPAT) guidance of between $60 to $70 Million.

The company stated that the HD4 project was 56% complete but said nothing about any likely financial impact on the HD4 project.

Only a month later on 19 September 2012, Macmahon Holdings announced a massive downgrade in its profit forecast estimating its FY2013 NPAT of between $20 to 40 million, representing a 41% to 71% profit downgrade.

The company gave as one of its reasons the significant additional costs of the HD4 project.

On the same day, the CEO, Nick Bowen resigned and Macmahon’s share price dropped by almost 40% or 20 cents per share to 32 cents per share.



General Information Only

S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.

Conflicts of Interest Notice

S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.

Publication Notice and Disclaimer

The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.

Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.

This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.

 

Discover Small Cap
Biotech Stocks

Join thousands of other Investors following our stock commentary for Free

X