TWE could face a class action over ‘deceptive and misleading’ conduct

Treasury Wines Estates could be facing a class action by shareholders over the $160m write-down in stock which led to a 12 percent drop in shares and the ejection of chief executive, David Dearie.

Litigation funder IMF has claims that TWE engaged in ‘deceptive and misleading conduct’ in regards to disclosures in its troubled US business, and is calling upon shareholders to sign up for court action, The SMH reports.

TWE chairman, Paul Rayner has since blamed the oversupply of wine in the US – which led the destruction of almost 600,000 cases of old wine costing $34m, and a further $82.4m writedown on the value of bulk wine which was sold at fire sale prices – on a reporting oversight.

IMF, together with Maurice Blackburn Lawyers released a statement saying that a class action would allege that TWE engaged in practices that mislead the market, and in turn, breached its continuous disclosure obligations in regard to its over-stocked US distributors.

'The claims related to alleged misleading and deceptive conduct and allege breaches by Treasury Wine Estates of its continuous disclosure obligations in connection with the performance of its United States operations between 17 August 2012 and 14 July 2013 inclusive, although that period may ultimately be extended or shortened,’’ an IMF statement to the Australian Securities Exchange read.

TWE however ‘strongly denies’ any allegations made against the company.

“TWE advises that no proceedings have been served against the company at this time.  TWE strongly denies any allegations of wrong doing and will defend any class action proceedings vigorously”, a TWE spokesperson told BusinessDay.

 

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