Theme park operator Ardent Leisure Group Ltd will defend itself against a shareholder class action following a fatal accident at its Dreamworld theme park in 2016, the company says.
Law firm Piper Alderman filed the case on Thursday in the Federal Court on behalf of people who bought shares between June 17, 2014 and October 25, 2016, the company said in a statement to the Australian Stock Exchange.
On the latter date, four people were killed on a river rapids ride at the theme park on the Gold Coast, after a malfunction in which two rafts collided and flipped onto a mechanical ramp.
The law firm in a statement alleged Ardent misled investors about the safety measures in place at Dreamworld in the years preceding the accident, which in turn inflated the group’s share price.
“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,” Greg Whyte, litigation partner at Piper Alderman, said.
Ardent Leisure, in response to the lawsuit, said it “strongly denies any contraventions as alleged and believes the proceedings to be without merit”.
Ardent Leisure’s shares fell 7 per cent in the final hour of trade after the incident and the company has since struggled to increase profits and win back investor trust.
In February, a coroner looking into the accident found the theme park was ultimately responsible and referred the incident to an industrial prosecutor.
The coronavirus outbreak has increased the pressure on Ardent as social distancing rules have shuttered a number of its parks in the United States and Australia since late March.