CuDeco’s reality adjustment wasn’t a day old before the ambulance chasers began prospecting for shareholder class actions – a business that might need the same sort of clarification as reporting drill results.

There’s
something unsatisfactory about one group of shareholders effectively
suing all shareholders (including themselves) when the company they own
makes a mistake in its public announcements. Did any of the punters
piling into Australian Mining Investments on the first flush of the
drilling results really believe it was another Escondida? Do lawyers
want to sue racing writers if their tips are wrong? It was that sort of
a game. Frithy in the Oz reasonably points to the grey area of reserve classifications – a problem that’s existed as long as exploration.

The
class action thingy in recent years has included the ridiculous
situation of former GIO shareholders suing AMP because they (GIO
shareholders) didn’t accept AMP’s takeover offer for their worthless
company. Artistocrat is still fighting a class action resulting from
its period of poor management and disclosure – but any shareholder who
bought in then would now be well ahead anyway under the new regime.

It
would make more sense for egregious corporate behaviour to be smashed
by the watch puppies rather than bounty hunters seeking legal fees. The
sub-group of shareholders are only suing other shareholders who had
been taken on the same wild ride.

Not that there isn’t a
healthy role for class actions in other settings – such as yesterday’s
$30.5 million settlement by the vitamins cartel of Roche, BASF and
Aventis. As The Smagereports, that deal must have Amcor and Visy more than a little worried about what awaits their alleged cardboard box cartel.

With
Visy and Dick Pratt promising to fight that allegation with all the
legal force a billionaire can muster, Amcor in particular might be
wondering at the cost it will still have to bear for blowing the
whistle.

Maurice Blackburn Cashman, the same mob that’s just
made a killing on the fees for its vitamins action, is already seeking
$200 million from Amcor, boasting that it’s the biggest class action in
Australian legal history. Their media release has MBC principal Ben Slade spinning it thus:

Maurice Blackburn Cashman is pleased to be supporting so
many small, medium and large companies who have been given a raw deal.
It is important for anyone who bought boxes from either Amcor or Visy
over the years to consider whether they have paid too much for boxes
and to take action.

Peter Fray

Get your first 12 weeks of Crikey for $12.

Without subscribers, Crikey can’t do what it does. Fortunately, our support base is growing.

Every day, Crikey aims to bring new and challenging insights into politics, business, national affairs, media and society. We lift up the rocks that other news media largely ignore. Without your support, more of those rocks – and the secrets beneath them — will remain lodged in the dirt.

Join today and get your first 12 weeks of Crikey for just $12.

 

Peter Fray
Editor-in-chief of Crikey

JOIN NOW