Class action by Intueri Education’s aggrieved investors has been settled out of court for an undisclosed sum with High Court approval given for a pro-rata distribution covering individual financial losses suffered by nearly 300 investors who joined a class action alleging directors and promoters of Intueri’s $175 million public float in 2014 made misleading statements about student numbers and revenue streams.
Auckland-based litigation funders stand to get 25 per cent of the pie left after payment of admin and litigation costs; Intueri investors share the remainder.
Not only are details of the settlement supressed, but evidence provided to the High Court seeking court approval for a formula dividing spoils between investors was similarly supressed.
Litigation funder LPF Group, however, was more forthcoming; publishing an interview with class action co-ordinators vaguely disclosing that investors would recover ‘between thirty per cent and fifty per cent of losses.’
Intueri investors claimed the company misrepresented the size of its business operations, its student success rate and its source of revenue at time of the public float.
Intueri sold to the public a package of three private training establishments delivering NZQA-accredited qualifications to domestic and international students.
A mis-match between financial data presented publicly to prospective investors and data reported privately to the Tertiary Education Commission led to an investigation.
It was found a substantial part of Intueri’s cashflow had been student fees from students who had withdrawn from courses; student fees sourced from government-funded StudyLink student loans.
On one calculation, fifty per cent of then current revenue and one hundred per cent of profit was attributable to revenue from these ghost students.
It was claimed Inteuri’s public float would never have got off the ground if this was known.
A class action settlement was negotiated on behalf of both those who subscribed to the 2014 public float and those who subsequently purchased on the secondary market.
In 2017, Inteuri went into liquidation.
The High Court approved a pro rata distribution to class action shareholders calculated on any loss made on the difference between the price paid for shares and the price on sale. Shareholders making a profit on sale receive nothing.
Justice Gardiner agreed investors should not receive compensation for loss of use of their money, despite some investors being held out of their money for longer than others.
All investors have been out of pocket since at least 2017. Administrative costs of calculating various payments due individual investors would outweigh the return otherwise available to those investors.
re Intueri Education Group Ltd – High Court (17.02.25)
25.067