Ardent to defend class action

Ardent Leisure, owner of Dreamworld, will defend a class action lodged against it on behalf of disgruntled shareholders.

The court documents accuse Ardent of misleading investors about safety measures in place at Dreamworld.

Dreamworld owner Ardent Leisure will defend a class action lodged against it on behalf of disgruntled shareholders who were hit by a $260m share plunge in the wake of the 2016 theme park ­tragedy.

The action by Piper Alderman alleges that investors in the listed company were misled about safety measures at Dreamworld prior to the October accident in which four park visitors were killed.

The action covers the period leading up to the accident, when Ardent shares rose to about $2.55, and accounts for losses suffered as they fell to around $2. Ardent said the class action was served against it on Thursday in the Federal Court on behalf of persons who acquired shares between June 17, 2014, and October 25, 2016.

It alleges contraventions of the Corporations Act 2001.

Ardent said it “strongly denies” any contraventions and believes the proceedings to be without merit.

“Ardent intends to vigorously defend the proceedings,” the company said.

Piper Alderman said the class action was against both Ardent and the former chief executive of Dreamworld, Craig Davidson, who left in 2018, and said it had investigated the claim for more than two years.

The claim is funded by Woodsford Litigation Funding and conducted by Piper Alderman’s litigation partner Greg Whyte.

The court documents accuse Ardent of misleading investors about safety measures in place at Dreamworld in the years preceding the accident at the theme park and argue that this conduct artificially inflated the company’s share price.

The law firm said Queensland coroner James McDougall’s findings in February from a coronial inquest into the incident provided support for the falsity of Ardent’s public statements and the allegations now being levelled at the company.

Mr McDougall referred Ardent to the Office of Industrial Relations to consider whether it had broken workplace laws. He said there was a “systemic failure” in all aspects of safety at Dreamworld, with the systems in place “frighteningly unsophisticated”.

Ardent chairman Gary Weiss, who was appointed after a shareholder revolt in 2017, said in the wake of the findings that there had been significant changes to the company’s operations and also emphasised the significant improvements in safety.

“The coroner’s findings support our view that the tragic events of October 2016 occurred because of a total failure in Ardent’s corporate governance framework,” Mr Whyte said.

“We believe Ardent’s failure caused harm not only to all those directly affected by the incident, but also to the group’s shareholders who were misled into thinking Dreamworld was a secure investment operating at the highest safety standards for families and thrillseekers alike,” he added.

Woodsford chief investment officer Charlie Morris said investors had suffered significant losses as a result of Ardent’s “misleading conduct relating to this tragic event”.