Iluka faces court action by shareholders
PERTH (miningweekly.com) – Mineral sands miner Iluka may be facing a class action, after law firm ACA Lawyers announced on Monday that it had obtained funding to start proceedings against the company on behalf of shareholders.
The class action will allege that Iluka failed to comply with its continuous disclosure obligation and engaged in misleading or deceptive conduct.
ACA Lawyers principal Steven Lewis said that the class action would seek compensation on behalf of Iluka shareholders who acquired their shares between May 2012 and July 2012.
“It will be alleged that Iluka’s zircon sales forecast in May 2012 was overly optimistic and not achievable. The company had information prior to July 2012 that it could not achieve its forecast and did not keep the market informed,” Lewis said.
In July of that year, Iluka substantially downgraded its forecast for zircon sales to between 200 000 t and 300 000 t, having previously informed the market in May that zircon sales would be around 400 000 t.
Following the July announcement, Iluka’s share price crashed from A$11.70 to A$8.88 a share.
Iluka said on Monday that the company had not received any documented claims regarding the pending law suit, adding that it would "vigorously" defend its position if such claims were made.
In its defence, the miner said that market conditions in 2012 were extremely volatile for mineral sands producers, and in the case of zircon, conditions had deteriorated markedly during the year.
“Market conditions in 2012 led Iluka to make formal disclosures to the ASX in May, updating guidance parameters issued in February, and again in July. In this regard, Iluka is of the view that it has at all times, fulfilled its disclosure obligations,” the company said.
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