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Murray Goulburn ‘misleading’: lawsuit

murrayEmbattled milk producer Murray Goulburn and its directors are being sued for allegedly misleading investors when it partially floated on the stock market in mid-2015.

The company’s share price has more than halved after announcing a profit downgrade and a retrospective price cut for farmers, leading Elcar super fund trustee John Webster to launch legal action in the Victorian Supreme Court on Monday.

The lawsuit alleges Murray Goulburn made “misleading or deceptive statements” about its revenues and expected income in the share issue’s product disclosure statement.

Murray Goulburn cut the price it pays farmers for milk solids from $5.60 a kilogram to between $4.75 and $5 a kilogram in the past month.

It blames a slump in global prices – down about 60 per cent since early 2014 – for the decision.

Three directors have quit the board since the April 27 announcement, which cost the jobs of Murray Goulburn MD Gary Helou and CFO Brad Hingle.

Murray Goulburn has 21 days to respond to the writ.

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