Insurance giant QBE has agreed to pay $132.5 million to settle a class action launched by shareholders who were angry about a plunge in its share price in 2013.
QBE was sued by Money Max Int in 2015 on behalf of a group of shareholders wanting to recover money lost when the insurer’s share price suffered its biggest single-day fall in more than a decade in December 2013.
Money Max claimed that QBE failed to comply with continuous disclosure obligations and engaged in false and misleading conduct in the lead-up to the revised profit guidance released to the market in December 2013.
On December 9, QBE announced it would post a $250 million loss in 2013, linked to asset writedowns in its North American operation.
The market responded by wiping $4 billion off the company’s value.
The company’s share price dropped more than 22 per cent in a single day and 30 per cent over two days.
QBE, which has not admitted liability, on Friday said the $132.5 million includes Money Max’s costs and interest but adds that the payment will have no material impact on its 2017 second-half earnings.
The settlement is subject to court approval.
QBE shares closed down 3.0 cents, or 0.3 per cent, at $10.68.