Shareholders claim in a class action against Irish automotive seating manufacturer Adient PLC that the company failed to disclose operational problems with its core business while touting an expansion plan and telling investors it was “solidly on track.”
The complaint, filed in the Southern District of New York by lead plaintiff Charles Eric Hyder, says the company claimed it was on track for a 200 basis point margin expansion by 2020, but in a January 2018 conference call, defendants revealed their actual point margin fell short of projections, prompting a quick drop in Adient’s market value.
Adient took a 9.8 percent hit, closing at $74.15 the day after the call and falling further to $66.77 in the weeks following. The company’s stock has been steadily declining from its 52 week high of $85.32 to just $31.38 at close on October 30.
May of 2018 fared no better after a Securities Exchange Commission filing revealed an additional net impairment charge which caused another roughly 10 percent drop, according to the complaint.
The final sharp drop for the company came when Adient’s chairman and CEO Bruce McDonald stepped down.
“Defendants had actual knowledge of the materially false and misleading statements,” the investors claim. “ Defendants acted with reckless disregard for the truth in that they failed or refused to ascertain and disclose such facts as would reveal the materially false and misleading nature of the statements made.”
The class is represented by Jeremy A. Lieberman, J. Alexander Hood II and Jonathan Lindenfeld of Pomerantz LLP in New York, and Peretz Bronstein of Bronstein, Gewirtz & Grossman LLC in New York.