Last November, in response to the claims, a2 Milk said: "The company considers that it has at all times complied with its disclosure obligations, denies any liability and will vigorously defend the proceedings."
The initial class action, filed by Slater and Gordon, was on behalf of investors who bought shares over a nine-month period during which the infant formula maker posted four earnings downgrades.
The claim was brought on behalf of shareholders who suffered losses after acquiring a2 Milk shares on the ASX and NZX between August 19, 2020, and May 9, 2021.
"The class action alleges that a2 Milk engaged in misleading or deceptive conduct in breach of the Corporations Act," Slater and Gordon said in the claim.
"The company is also accused of breaching continuous disclosure rules in posting four downgrades on September 28 and December 18 last year, and February 25 and May 10 of this year," it said then.
On May 10 last year, a2 Milk flagged a review of its key China business and a blowout of more than $100 million in provisions for old stock.
The latest cut to its outlook resulted in a2 Milk expecting full-year sales of $1.2 billion to $1.25 billion and a group EBITDA margin of 11-12 per cent.
This compared to August 19, 2020, guidance for strong sales growth and an ebitda margin of 30-31 per cent.
Slater and Gordon said a2 Milk "was or ought to have been" aware" that the full-year 2021 guidance did not adequately consider factors likely to impact the company's financial performance.
This included a2 Milk's attempts to boost sales by pushing English-label infant formula tins through the cross-border e-commerce channel, with discounting consequences that would in turn negatively impact sales in the daigou channel.
It was also alleged that a2 Milk's sales in the cross border e-commerce channel would in turn be impeded by the disruption to the daigou/reseller channel and the loss of associated marketing activity to stimulate consumer demand.
"As a result of our investigation following a2's profit downgrades throughout 2021, we concluded that there was a strong basis to allege that the company provided misleading guidance and was obliged to correct the market's understanding of its financial position at a much earlier time,"
Downgrades by a2 during the August 2020 to May 2021 claim period caught the market by surprise and revealed that a2 had been facing systemic and structural issues with its distribution networks at an early stage of the financial year, Slater and Gordon said.
Shares in a2 Milk, which peaked at $21.51 in July 2020, traded today at $4.69 - their lowest point since August 2017.