ASX Shareholder Claims

Two class action proceedings.

Supreme Court of New South Wales, Proceedings 2017/193375 & 2017/347082

First Proceeding:
File Number

2017/193375

File Title

TW McConnell Pty Ltd as trustee for the McConnell Superannuation Fund v SurfStitch Group Ltd (in administration).

Solicitors for Applicant

Gadens.

Funder

International Litigation Partners No. 17 Pte Ltd.

Claim Overview

The claim alleges that public downgrades came too late and should have been issued in 2015 when it was clear SurfStitch would be unlikely to meet the optimistic forecasts then in place.

Class Members

The proceeding claims on behalf of two classes of SurfStitch shareholders:

  1. those who acquired shares between 23 October 2015 and 9 June 2016 and retained shares on any of 25 February 2016, 3 May 2016 or 9 June 2016; and
  2. those who already held shares on 23 October 2015 and retained shares during the above periods relying on the forecasts and statements issued by SurfStitch.
Capacity to Join

Closed.

Second Proceeding:
File Number

2017/347082.

File Title

Nakali Pty Limited v SurfStitch Group Ltd (administrators appointed).

Solicitors for Applicant

Johnson Winter & Slattery.

Funder

Vannin Capital.

Claim Overview

The claim arises out the decline in the share price of SurfStitch Group Limited (ASX:SRF) between November 2015 and June 2016 from $2.13 to $0.32. There are two underlying allegations to the claim:

  • Having indicated to the market in August 2015 that it expected its EBITDA in FY2016 to increase by 100% over FY2015, SurfStitch failed to disclose that in fact it was trading at a loss; and
  • To cover this up, SurfStitch adjusted its 31 December 2015 results by entering, on 22 December 2015, a series of transactions that enabled it to add revenue of $20.5m (and profit of $18.5m) for a deal to license the content on its web site. The effect of these transactions was that SurfStitch would incur a loss of approximately $2m.
Class Members

Shareholders who:

  • acquired SRF shares between 27 August 2015 and 24 February 2016 and were still holding some or all of those shares on 25 February 2016, 3 May 2016 or 9 June 2016;
  • acquired SRF shares between 25 February 2016 and 2 May 2016 and were still holding some or all of those shares on 3 May 2016 or 9 June 2016; and/or
  • acquired SRF shares between 3 May 2016 and 8 June 2016 and were still holding some or all of those shares on 9 June 2016.
Capacity to Join

Closed.