Kingsford Smith Drive Upgrade Developer Faces Shareholder Class Action

Video Still Credit: Brisbane City Council / YouTube

A shareholder class action against the Kingsford Smith Drive upgrade developer, Lendlease Group (LLC), has been filed in the Supreme Court of New South Wales.

The class action alleges that LLC failed to adequately disclose a long-running problem that has been troubling its Engineering and Services Business; resulting in a single-day trading loss of 18 percent.


It was also reported that in the year ending June 30, the Engineering and Services division lost $218 million, driven mainly by its three engineering projects — NorthConnex in Sydney, Kingsford Smith Drive, and Gateway Upgrade North, both in Brisbane.

Construction issues such as weather delays, inability to access ready-planned work, and defective design that required rework were among the reasons cited for costs blow out.

Kingsford Smith Drive Upgrade | Video Credit: Brisbane City Council  / YouTube

On 9 November 2018, LLC revealed to the market that it had “identified ‘further underperformance’ in its Engineering and Services Business, which it considered was likely to necessitate a provision of approximately $350 million after tax,” prompting the company to review its Engineering and Services Business.

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LLC’s share price considerably declined that day, resulting in a single-day trading loss of more than 18 percent. On 25 February 2019, share prices tumbled further after half-year results showed pre-tax loss amounting to $500 million due to its Engineering and Services Business’ underperformance.

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LLC also announced that its Engineering and Services Business is ‘no longer a required part of the Group’s strategy” and is looking at an estimated restructuring cost of $450-$550 million before tax. The following days saw LLC’s share price suffering from further declines.


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The shareholder class action filed by legal firm Maurice Blackburn, on behalf of Lendlease investors, alleges that LLC “failed to comply with its continuous disclosure obligations under the Corporations Act 2001 (Cth) and the ASX Listing Rules and engaged in misleading and deceptive conduct in respect of the performance of its Engineering and Services Business.”

Maurice Blackburn encourages Lendlease investors who acquired an interest in Lendlease shares and/or American Depositary Receipts between 17 November 2017 and 8 November 2018 (inclusive) to register by COB 17 May, 2019.

“We will allege that investors who acquired securities in this period paid an inflated price and should be entitled to recover some of their losses through our shareholder class action,” Maurice Blackburn said.