Great Southern court bid
The Supreme Court of Victoria was told on Thursday that electronic documents found as the trial had almost concluded could now shed further light on the failure of the $1.8 billion managed investment scheme in 2008.
Garry Bigmore, QC, for the investors, said the evidence showed the extent to which investors had been "misinformed" about productivity problems in some published product disclosure statements.
"With the arrival of the new evidence, the extremely poor performance of Great Southern's 1994 to 1996 timber schemes was fully exposed," he said.
But the counsel for the defence, Andrew McClelland, blasted the "artificial way" the plaintiffs had tried to link the collapse of Great Southern to "minutiae" about forestry practices, when it was really linked to funding problems caused by the global financial crisis.
The trial, before Justice Croft, continues on Tuesday.
Frequently Asked Questions about this Article…
The Great Southern collapse refers to the failure of a $1.8 billion managed investment scheme in 2008. Retail investors were wiped out when the forestry-based scheme failed, prompting legal action and court hearings in the Supreme Court of Victoria.
Investors say electronic documents discovered late in the trial could show management concealed damaging information about the health of forestry plantations and productivity problems, and they want those documents admitted as fresh evidence.
According to investors' counsel, the documents could shed further light on why the scheme failed by demonstrating that investors were misinformed in some product disclosure statements and by exposing poor performance in certain timber schemes. The documents could influence the court's view of management conduct.
Investors allege Great Southern management concealed damning information about the health and productivity of its forestry plantations, including problems that affected the performance of some timber schemes sold between 1994 and 1996.
The defence argues the plaintiffs are artificially focusing on detailed forestry practices. They say the collapse was primarily caused by funding problems driven by the global financial crisis, not minutiae of forestry operations.
The new evidence was said to fully expose the extremely poor performance of Great Southern’s 1994 to 1996 timber schemes.
The case is before the Supreme Court of Victoria and is being heard by Justice Croft, with the trial continuing according to the report.
The case highlights the importance of carefully reviewing product disclosure statements and understanding both operational risks (like plantation health) and broader funding or market risks (such as those from the global financial crisis). It also shows that late-discovered documents can materially affect litigation about failed investments.
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