Fox Business cited a statement from Slater & Gordon Ltd, who revealed on Thursday that it is preparing a class-action suit against Billabong International Ltd, the Australian surfwear company . According to the law firm, it will be pursuing Billabong over allegations that it misled customers regarding its information disclosure on its 2012 financial earnings guidance.
Slater & Gordon said that Billabong had given its earnings guidance for 2012 which lacked reasonable grounds in doing so. The conduct in question was the surfwear company's decision to withdraw its guidance originally released on August 19, 2011. The financial guidance reportedly showed that the surfwear company would show strong earnings growth in the financial year of 2012. Billabong, however, withdrew the financial guidance after a few months and issued a new one that showed its earnings would be suffering a significant fall. Fox Business said the move sent Billabong's shares plummeting over 50% the days following the new financial guidance, Slater & Gordon claimed.
Senior associate Odette McDonald at Slater & Gordon said, "Our clients allege that Billabong misrepresented the assumptions on which the FY12 earnings growth guidance was based. They further allege that, had the market been informed of the true dependencies underpinning the earnings forecast, it would have disregarded the guidance as unrealistic, and this would have been reflected in Billabong's share price."
When contacted by Fox Business about the planned lawsuit by Slater & Gordon on behalf of the surfwear company's shareholders, Billabong had said in its latest regulatory filing with the Australian Securities Exchange that it has yet to be contacted by the law firm or get served with any proceedings regarding its 2012 financial guidance. The company also said that should it receive one, it will be defending itself from the claims vigorously.
Slater & Gordon said that it would be seeking compensation for the trouble Billabong purportedly had caused on its share price.
