- New case claims investors were misled
- Shareholders seeking redress for losses
- Share price falls another 1%
Law firm Harcus Parker says it is seeking compensation for shareholders in Home REIT (HOME), claiming the sheltered housing investment company misled investors.
It believes investors paid more for their shares than they were worth, and that Home REIT hasn’t invested the proceeds from the stock market listing-related fundraising in accordance with its stated investment objective and policy.
Harcus Parker also argues that the business model and security of Home REIT’s income streams are ‘materially different’ from the information given to investors.
WHY ARE INVESTORS UP IN ARMS?
Home REIT was set up as investment vehicle to help tackle homelessness.
Its share price has more than halved since September after US short seller Viceroy published a damning note which claimed the trust’s accounts showed poor operating results, some of its biggest tenants weren’t paying rent, and many charities weren’t able to service their leases on a long-term basis, much less the 25 years proposed by the company.
Harcus Parker is seeking compensation for investors who have suffered significant losses by owning shares in Home REIT.
The law firm says its legal team has carried out ‘extensive research into the company’s behaviours, transactions, assets and business model over several months, and it intends to pursue a case against the company ‘on the grounds that it has used investors’ money in a way which runs contrary to what investors were told’.
DOES HARCUS SIDE WITH VICEROY?
Harcus Parker says its own research identified many of the issues raised in the critical report published by Viceroy last month, from the suitability of some of Home REIT’s accommodation, the nature of some lettings, the quality of some tenants and the valuation of some assets to the security of its income.
It also says it has reviewed Home REIT’s full response to the Viceroy report, which it says has not fundamentally changed its view of potential claims but instead ‘supports its argumentation’.
A website has been set up for investors who want more information on Harcus Parker’s claim. If successful in court, the legal firm said it would donate a share of its fee to a homeless charity.
