(24 January 2010 – Australia) National Australia Bank has said it will fight a class action brought by shareholders for allegedly failing to disclose early enough the extent of its losses in the global financial crisis.Headed by law firm Maurice Blackburn, around 250 institutional and retail investors are seeking A$450 million in losses.
In May 2008, NAB announced a A$181 million charge on collateralised debt obligations (CDOs), which were partly linked to risky sub-prime mortgages.
Later the same year the bank announced it had been hit with a further A$830 million charge, pushing the total to more than A$1 billion.
This in-turn reduced the share price overall by 13.5 percent.
Maurice Blackburn principal Andrew Watson told a directions hearing at the Victorian Supreme Court yesterday that the bank should have revealed information to shareholders earlier.
‘As at January 1, 2008, there should have been an announcement to disclose significant writedowns,’ Mr Watson said.
‘The CDO market was in freefall from 2007.’
Outside the court, the lawyer acting for NAB, Geoff Healy, said the bank was still waiting to see a statement of claim.
‘We will be vigorously defending the case,’ he said.
Judge Tony Pagone adjourned the matter for a further preliminary hearing on March 28.