Two law firms announce possible class action against Blue Sky Alternative Investments

TWO law firms have announced possible class action lawsuits against embattled Brisbane fund manager Blue Sky Alternative Investments, headed by Rob Shand.

Blue Sky Investments’ Rob Shand.

THE vultures are circling.

Two law firms have announced possible class action lawsuits against embattled Brisbane fund manager Blue Sky Alternative Investments, headed by Rob Shand.

Both Gadens and Piper Alderman are encouraging investors to register with their firms as they investigate allegations that Blue Sky misled the market.

Blue Sky emphatically denies the allegations.

But the company’s share price continued to nosedive yesterday as it struggled to blunt accusations by US-based short seller Glaucus Research Group that it has exaggerated asset values, misrepresented performance and charged exorbitant fees.

A Gadens legal eagle told City Beat yesterday that he had already seen “quite a positive and strong reaction’’ from investors, with more than 30 expressing interest in a class action.

“A lot of people have been investing in Blue Sky for their retirement plans and obviously they are understandably distraught that this has occurred and wealth has been stripped out of the company,’’ he said.

The potential legal action is hard to miss, since a Gadens ad spruiking the class action is the first thing that pops up when you Google search “Blue Sky Alternative Investments’’.

But it’s still early days, with Gadens and Piper Alderman stress-testing the case against Blue Sky as they pore over Glaucus allegations, ASX announcements and other publicly available information.

There’s also the little matter of litigation funding, which neither firm has locked in yet.

Illustration of Rob Shand by Brett Lethbridge in today’s City Beat column.

OPPOSITION RESEARCH

A BLUE Sky spin doctor declined to comment yesterday on the potential class action battles.

But a source close to the group revealed that he expects more opportunistic law firms to jump on the bandwagon in a bid to gin up business.

“It’s really just testing the waters but, in my experience, it’s just a whole lot of noise and nothing ever happens,’’ he said. They can only hope!

As you might expect, Blue Sky has done a bit of opposition research on Glaucus, which was named after a Greek sea god who used prophetic powers to save endangered sailors and fishermen.

They learned that Glaucus has short-sold more than 20 listed companies around the globe since launching in 2011.

Half of those firms were listed in Hong Kong, where Glaucus only managed to chalk up a win with one of the companies.

Notably, another short seller ran afoul of Hong Kong market regulators in 2016 when he was found to have acted “recklessly or negligently’’.

Blue Sky operatives have also found that at least three companies previously targeted by Glaucus now enjoy substantially higher share prices.

SOWERBY FIRES BACK

MEANWHILE, Blue Sky founder Mark Sowerby has fired back at Glaucus, which has questioned why he cashed out 40 per cent of his shares for a $27 million payday when he retired as boss in 2016.

Glaucus noted that “if Sowerby had confidence in Blue Sky, he would not have exited such a large block position so quickly’’.

But Sowerby, who stepped down last year as Queensland’s chief entrepreneur, maintains he invested his savings in Blue Sky and the sale merely strengthened the family’s balance sheet.

“The shares that I retained and continue to retain in Blue Sky (represent) more than two-thirds of our personal wealth,” he said.

“This is a good business full of good people.’’

SHAND’S SALE

IN case Shand didn’t have enough on his plate right now, he’s also trying to find a buyer for his acreage property in Brisbane.

The Pullenvale home, which dates from 1970, came on the market last month with offers sought above $1.5 million.

Records show the Blue Sky chief and his missus, Anna, acquired the five-bedroom dwelling in mid-2013 for $993,500.