A Federal Court judge has reportedly refused to intervene in the lodging of a multi-million-dollar class action lawsuit over alleged breaches of market disclosure obligations by engineering group WorleyParsons in 2013.
According to an AFR report WorleyParsons, which specialises in project delivery and consulting in resources, energy and processing industries, had lodged an interlocutory application to halt a case brought by ACA Lawyers.
But Federal Court Justice Foster denied the engineering group’s application, and has told it to file its defence to the class action by February 16, ahead of a February 23 hearing, according to the report.
WorleyParsons is accused of engaging in “misleading or deceptive conduct,” over a 2013 profit downgrade.
In the November 20, 2013 trading update, WorleyParsons downgraded its FY14 guidance from $322 million to between $260 million and $300 million.
It explained the downgrade was due to “reduced professional services revenue”, the “implementation of a rigorous cost reduction program”, and a weaker performance in its Australian and Canadian businesses.
The day prior to the announcement, WorleyParsons’ closing share price was $21.59. The day after the announcement, the share price closed at $16.00.
The class action argues the previously unannounced developments, which contributed to the 26% drop in the company’s stock, should have been signalled to the market earlier than that announcement.
It therefore alleges WorleyParsons breached continuous disclosure obligations by not reporting the issues ahead of time.