Residential aged care provider Estia is facing the threat of a class action over its 2016 financial year results and the guidance it gave for the 2017 year.
Sydney litigation firm Phi Finney McDonald is gathering shareholder support for a proposed class action that will be funded by Investor Claim Partner.
The proposed action will allege that Estia failed to disclose to the market the serious difficulties the business was experiencing in the lead up to the publishing of its 2016 financial year results and its fiscal 2017 guidance…
“We consider there are strong grounds to allege that Estia misled investors between 19 April 2016 and 5 October 2016, concealing its ongoing difficulties in integrating its recently acquired aged care businesses, and providing profit guidance that it had no reasonable prospects of achieving,” said Tim Finney, principal at Phi Finney McDonald in a statement on Thursday.
“As a result, Estia shares traded at substantially inflated prices, and then crashed when the market learned the truth.”