Former shareholders of now-defunct Discovery Metals plan to launch class action against KPMG Financial Advisory Services over a valuation of the company that was made almost five years ago.
The proposed class action arises out of an independent expert valuation of the copper company prepared by KPMG and released in November 2012, according to an ASX announcement submitted by Litigation Capital Management.
“The valuation was commissioned by the Discovery board to support a recommendation to shareholders in respect of an off-market, takeover bid received from Cathay Fortune Investment seeking to acquire all of the ordinary shares in Discovery for $830 million at $1.70 per share in October 2012,” the ASX announcement outlined.
The proposed class action will allege the KPMG valuation was negligent and misleading, or deceptive within the meaning of section 670A of the Corporations Act 2001, the announcement continues.
“Shareholders relied on the KPMG valuation to reject the takeover bid and suffered loss and damage as a result,” the announcement stated.
Investors who held shares in Discovery between November 23 2012 and February 15 2013 may be eligible to participate in the class action.
Discovery entered voluntary administration in early 2015, before being wound up later that year.