Dick Smith Holdings Ltd: Supreme Court gives green light for class action to proceed

July 25, 2017

Yesterday, the Supreme Court of NSW granted leave to Bannister Law to file a class action against DSHE Holdings Ltd (Receivers and Managers Appointed) (In Liquidation) (formerly known as Dick Smith Holdings Ltd) (DSHE). As the DSHE is now in liquidation, Bannister Law – on behalf of shareholders – had to apply for leave from the Supreme Court before action could commence.
According to Charles Bannister, Principal of Bannister Law, the ruling is a win for many DSHE shareholders who lost out in the company’s demise.

“Thousands of shareholders have lost tens of millions because, we allege, DSHE contravened provisions of the Corporations Act, including by engaging in misleading or deceptive conduct on various occasions throughout 2015 in relation to DSHE shares. The Court’s ruling today is great news for those shareholders. Had the Court denied leave, our case was over before it really began,” said Mr Bannister.

“We already have hundreds of registrants whom purchased shares within the relevant period of 16 February 2015 to 31 December 2015 and suffered loss due to the alleged misconduct of DSHE.”

It is alleged that the publication by DSHE of its financial statements, both half year and full year results, in 2015 was misleading and deceptive because DSHE represented through directors’ declarations that the accounts were prepared in accordance with the Australian Accounting Standards and gave a true and fair view of the financial position and performance of the Group when that was not the case (because it is alleged that the accounting treatment of rebates artificially inflated DSHE’s reported profit and was not in accordance with the Australian Accounting Standards).

Shareholders claim that during 2015 the share price was inflated as a result of the contraventions of the Corporations Act and that they have suffered loss and damage as a result.