Investors filed lawsuits against Nufarm

Hundreds of disgruntled investors have registered for a class action lawsuit against crop-protection group Nufarm, and lawyers have suggested the number of claimants could balloon into the thousands by the end of this week.

Two separate lawsuit actions have reportedly been initiated looking for recovery of money allegedly lost because of a legal “material non-disclosures” explanation. According to a report by Business Day.com of Australia authored by Jared Lynch, “Nufarm managing director Doug Rathbone is accused of repeatedly misleading investors with optimistic forecasts.”

The law firms of Maurice Blackburn and Slater & Gordon have launched the two separate actions in Australia. Nufarm has denied any and all allegations of wrongdoing, and said it will defend the proceedings vigorously.

Hundreds of potential claimants who previously invested in Nufarm stock have signed up and many more are anticipated; the list includes institutional and retail investors. Of course, the legal rankling has taken its toll on Nufarm’s stock value. As of the end of July, stock prices in Australia had fallen about 24 percent from a February high of $5.73, the Business Day reporter wrote.

The Maurice Blackburn legal team says its claim focuses on statements made related to sales of glyphosate herbicide.  The lawyers suggest that a third of Nufarm’s revenue comes from glyphosate sales. “Maurice Blackburn alleges that Nufarm failed to adequately inform the market of the adverse effect on the profitability of its business of a falling international glyphosate market between September 28, 2009, and August 31, 2010,” Business Day.com reports.

"Nufarm told the market in September 2009 that 2009 glyphosate write-downs would lead to a profit in 2010. But a loss of $28.4 million in glyphosate stocks between August and December 2009 was not announced until March the following year,” Maurice Blackburn lawyers allege.

The Slater & Gordon lawyers allege something similar in contending that Nufarm didn’t have reasonable grounds for predicting an operating profit of $110 million to $130 million for 2009-10.  Business Day reports that Rathbone at different 2010 meetings expressed improper forecasts while raising $250 million in new stock shares income.

Depending on a federal court hearing, the two separate court filings could be combined into one action.