Guess the weight
Ryanair is sued in the U.S. for misleading investors and for building profits on worker exploitation
A complaint has been filed against Ryaniar by an Alabama pension fund. The suit against Ryanair Holdings Plc was filed on 06 November in the US District Court in Manhattan. The fund is seeking class-action status and damages for all investors in Ryanair's American depository shares during the period May 30, 2017 to September 28, 2018.
The claims include allegations that Ryanair lied about the health of the company, inflated its share price and inflated its ability to keep costs down. The complaint alleges that Ryanair misled investors in regulatory filings and on conference calls. The allegations relate to statements by Ryanair about labour stability and its 'industry leading' contracts with pilots and cabin crews. The fund claims that Ryanair overstated its ability to manage its labour relations. It also claims that Ryanair built its historical profits on an undisclosed and unsustainable foundation of worker exploitation and employee turnover.
In December 2017 worksforce unrest forced the Dublin-based low-cost carrier to recognise unions for the first time. Ryanair strikes stranded thousands of passengers in several countries during the summer of 2018. Ryanair acknowledged its labour issues on October 01 2018, when it cut its full-year profit forecast. The Ryanair share price closed at more than one-third below its mid-March level on the day of the announcement.
City of Birmingham Firemen's and Policemen's Supplemental Pension System
In the U.S. it is routine for shareholders to sue companies if they consider that unexpected share price declines have occurred.The lawsuit has been filed by the City of Birmingham Firemen's and Policemen's Supplemental Pension System. Robbins Geller Rudman and Dowd, law firm for the pension fund, specialises in securities fraud.
Ryanair says it has not yet received any documentation in respect of the lawsuit. It asserts that they are bogus 'ambulance chaser' claims. It has also stated that it will vigorously defend and defeat the lawsuit.