Sandalwood forestry group Quintis saw its market value collapse by 72 percent after it conceded that it had lost a significant deal with Nestle’s Galderma, without the knowledge of its board and top management. Further implications of this included a plunging bond price, a downgrade of the company’s debt and strong advice from hedge fund Glaucus to sell off Quintis shares.
Quintis’ shares are expected to come out of a trading suspension in the coming week, where promises have been made to provide updated disclosure that cover its earnings, and a response to an ASX query issued May 11. However, this has not quelled investor frustration over Quintis’ failure to meet its disclosure obligations.
Three law firms – Bannister Law, Slater & Gordon and Piper Alderman – are examining the prospects of mounting a class action on behalf of investors who purchased shares between the date in which the Galderma deal was lost and May 9. The ASX-listed Litigation Capital Management has pronounced support for Piper Alderman’s potential action, its managing director stating “It is clear that investors have been deprived of certain information and we are investigating whether there is a viable basis for a class action to recoup the losses they have suffered as a result.
The success of a class action against Quintis will be contingent upon proving that Quintis’ directors and officers were in breach of the continuous disclosure obligations. Whether such allegations can be proven remains to be seen.