Former rich list member and ABC Learning Centres founder Eddy Groves has launched a $7.3 million claim in the Queensland Supreme Court against listed broking firm Austock, claiming the broker failed to execute a share trade that cost him millions.
Austock informed the Australian Securities Exchange last night that Groves has formally launched his complaint, and said it will “vigorously defend the proceedings”.
Groves’ claim relates to his position as a former major shareholder in Austock.
He alleges that on February 27, 2008 – just days after Groves was hit with a margin call due to a sudden value in the value of ABC Learning Centres shares – he gave an order to sell approximately five million shares in the broker at the market price, which was trading on that day at $1.40.
But Groves alleges that the order was not executed by Austock, and as a result he suffered losses. All up Groves is claiming $7.3 million in damages, plus interest and legal costs.
However, Groves has dropped a previous claim for “consequential losses” of $5.5 million on the subsequent sale of his private helicopter and luxury yacht in September 2009.
Austock “maintains that at no time did Mr Groves instruct Austock to sell his shareholding” in the company and has retained high-profiled Melbourne law firm Arnold Bloch Leibler to run its defence.
No date has been given for the start of the court battle.
The relationship between Groves and Austock goes back many years.
The broker was a key adviser to ABC on its float in 2001, and helped advise the company as it went on its acquisition spree throughout the 2000s.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
