Ann: Federal Court delivers favourable judgment in class action, page-2

This relates to 2013 when WOR downgraded its earnings forecast, disappointing the market.

Since then, management has changed.

This is part of an 'AFR' report this afternoon (22 Oct 2020):

Worley employees were worried about "a culture of fear" at the engineering group in 2013 and losing their jobs if they told the truth instead of providing optimistic financial forecasts, a Federal Court judgement has revealed.

Federal Court Justice Jacqueline Gleeson on Thursday dismissed a class action against Worley that alleged the company misled investors when it slashed profit forecasts in 2013, and ordered ACA Lawyers, now owned by Shine Lawyers, to pay the engineering group's costs.

But she found that Worley's budget setting process in 2013-2014 under former chief executive was Andrew Wood was affected by "a culture of optimism" and there were cases where some of the company's offices "inflated their projections of blue sky revenue in order to meet senior management expectations."

ACA La filed a $50m class action in the NSW branch of the Federal Court against the engineering group in 2015.

The case alleged that Worley engaged in "misleading or deceptive conduct" in 2013 because it did not provide a reasonable explanation for why its three main reasons for a November profit downgrade — a fall in professional services revenue, a cost-cutting program and the decline of its Australian and Canadian businesses — were "unexpected or unforseen developments".

Justice Gleeson found that while the basis for the downgrade was "plainly open to question" and that Worley's 2013-14 budget may have been "overly optimistic," she was not persuaded that the company's previous earnings guidance, given in August, lacked reasonable grounds.