Shareholders launch action against MFS, Allco and Centro

Shareholders of three businesses that have been hardest hit by the credit crisis have commenced class actions in an attempt to recover some of the wealth lost in recent tough market conditions.

Allco Finance, Centro Properties and MFS each face allegations that they failed to disclose crucial information about their debt positions in the period leading up to the credit crunch, The Australian Financial Review reports.

Law firm Maurice Blackburn is reportedly preparing to launch class actions on behalf of shareholders in each of the businesses, backed by litigation funder IMF.

Each of the companies concerned released financial reports in the six months before February this year that allegedly may not have adequately conveyed to shareholders the extent of the funding problems the companies faced.

The class actions will argue these failures breached continuous disclosure rules in the Corporations Act and constituted misleading and deceptive conduct.

For more on the turbulent times facing the banking and finance industry, don’t miss today’s SmartCompany/Dun & Bradstreet Industry Growth List for the banking and finance sector.