Shareholder Class Action – Downer EDI

LAW Firms

Maurice Blackburn, assisted by William Roberts Lawyers

Respondent

Downer EDI Limited

Relevant Period

23 July 2019 and 24 February 2023 (inclusive)

CASL is providing funding support for a class action on behalf of shareholders of Downer EDI Limited (ASX:DOW) (Downer) in the Supreme Court of Victoria.

This action is being conducted by Maurice Blackburn, assisted by William Roberts Lawyers.

If you acquired an interest in shares in Downer during the Relevant Period, you may be a group member.

Claim Overview

In December 2022 and February 2023, Downer announced that it had from April 2020 failed to correctly account for revenue from a major utilities contract (Accounting Irregularities).

The Accounting Irregularities meant the earnings Downer had reported across FY20, FY21 and FY22 were overstated by up to $40M on a pre-tax basis, and $22.2M on a post-tax basis. As well as requiring Downer’s FY20 – FY22 accounts to be restated, the Accounting Irregularities required Downer to revise its FY23 guidance in December 2022 and again in February 2023.

The class action alleges that during the Relevant Period, the market price for Downer’s shares were higher than their true value because during that time, Downer:

misrepresented its true financial position;
failed to disclose material information concerning the Accounting Irregularities; and
had no reasonable basis for its FY23 earnings guidance announced in August 2022 and December 2022.

The class action seeks to recover compensation from Downer and its auditor during the Relevant Period (KPMG) for the losses suffered by investors as a result.