ASX Shareholder Claims

Class Action – Dick Smith Holdings

ICP is funding a shareholder class action run by Johnson Winter Slattery on behalf of aggrieved Dick Smith investors who suffered losses due to alleged breaches of disclosure obligations and misleading and deceptive conduct, subject to sufficient interest from affected Dick Smith shareholders and the satisfactory completion of investigations.

Background to the allegations

Claim Overview

ICP Capital funded JWS to file a claim in the Federal Court seeking orders that the liquidator of DSH to provide business records including insurance and stock/rebate records to ICP’s client in accordance with sections 247(A) (i) and 486 of the Corporations Act relevant to ICP’s suspicion that DSH made representations in its Prospectus, and at various times in the period from its listing on the ASX until the appointment of Administrators, which gave a false impression to the market about the financial position of DSH and the value of DSH shares.

These representations arose, at least in part, by virtue of:

  • DSH accounting for provisions and supplier rebates in a manner which appears to have inflated its gross profit, gross margin, net profit and EBITDA and NPAT;
  • DSH apparently failing to adequately adjust the carrying value of inventories to recognise net realisable write-downs; and
  • DSH presenting in its Prospectus historical financial information for the 2011 – 2013 years, which overstated the value of assets and equity available to ensure its expansionary business plan would be possible.
Current Status

Orders were made on 20 December 2019, including the following:

(a)        Deloitte’s lay evidence in claims, together with a provisional list of documents by 17 January 2020;

(b)        Plaintiffs’ reply evidence by 24 January 2020;

(c)        Mediation to commence before 7 February 2020;

(d)        Deloitte’s third tranche of discovery by 7 February 2020;

(e)        Plaintiffs to serve a draft trial schedule by 7 February 2020;

(f)         Proceedings listed for directions on 18 February 2020;

(g)        Defendants’ lay evidence and expert forensic accounting evidence by 24 February 2020; and

(h)        Trial scheduled to commence on 9 March 2020.