That is a clear argument against class actions based on lost shareholder value. Not sure what the fuss is all about. All of that aside - you need a cause of action to commence an action in the courts (class action or sole plaintiff). It must generally be (if using provisions of Corporations Act 2001) some form of malfeasance, or negligence.
I have not seen any evidence of that yet with SGH. It seems today that all someone need do is mention class action and that's enough to make and prosecute a case. Ridiculous.
Making a business decision that moves against you after you have made it is most definitely not a breach of any section of the Corporations Act (2001). When will people read what is plainly before them?
I hope there is some selling on the basis of that article - those who can not read deserve to lose their shares to me - actually very frustrating reading some of the nonsense that gets posted around here.
"Some class actions can be justified, for example when general community health and safety issues are at stake.
Not so with actions taken in the name of recouping lost shareholder value. They're often just blatant opportunism, with a large chunk of the "benefit" going to a small group of parties instigating or funding such actions.
If there's been malfeasance or negligence in the boardroom, or a failure to keep the market informed in a proper way, then ASIC should do its job and enforce market standards and integrity. This role should not be outsourced by ASIC to class-action lawyers.
Where on the other hand shareholder value losses happen in the honest, risk-taking pursuit of corporate growth, ban the class actions. Public company directors are for the most part concerned enough for their reputations, assiduously built over many years, to try to do the right thing by shareholders, without subjecting them to legal greenmail if risks materialise.
Ending shareholder value-driven class actions will be good for the Australian economy. It will encourage corporate risk-taking. It doesn't involve any cost to the Treasury like tax incentives for start-up investing. And it will arrest the development of a burgeoning industry that seems, on current events, to have one rule for its friends and another for everyone else."
SGH Price at posting:
$1.02 Sentiment: Buy Disclosure: Held
- actually very frustrating reading some of the nonsense that gets posted around here.
