Biggest civil lawsuit looms
By Chen Li |
June 10, 2011, Friday
|
Print Edition
Print Edition
SHENZHEN-LISTED Wuliangye Yibin Co faces possibly the biggest ever civil compensation lawsuit filed by investors in the history of the Chinese mainland stock market following a 600,000 yuan (US$92,593) fine imposed by China's top securities supervisor for illegal information disclosure.
The liquor maker may eventually have to pay out a total compensation running into hundreds of millions or even billions given that the renowned liquor giant has nearly 450,000 stakeholders for its nearly 3.8 billion tradable shares in the stock market.
Lawyers in Beijing and Shanghai as well as Hebei, Guangdong and Zhejiang provinces have teamed up together to represent Wuliangye investors who suffered losses resulting from the company's information disclosure violations.
Song Yixin, a Shanghai-based lawyer, said he has received files from up to 200 investors last year. So far, another several dozens have asked for help. But he said the exact amount of compensation his clients are seeking is still unclear.
Song has already filed a lawsuit against Wuliangye for two of his clients who have a total of 70,900 shares, worth 329,100 yuan, of the Sichuan-based company.
Zang Xiaoli, another lawyer in Beijing, told the Economic Information Daily that she now has at least 30 clients who are demanding several millions of yuan in compensation. The number of investors seeking action is rising, she added.
The previous record for a civil compensation lawsuit against a public firm was Shenzhen-listed Dongfang Electronic Co in 2007. About 7,000 investors sued the firm for losses of 442 million yuan. Dongfang has 272,400 stakeholders for 978 million tradable shares.
On May 27, Wuliangye was fined 600,000 yuan by the China Securities Regulatory Commission for releasing false, untimely and incomplete information. Eight executives were fined between 30,000 yuan and 250,000 yuan each.
The liquor maker may eventually have to pay out a total compensation running into hundreds of millions or even billions given that the renowned liquor giant has nearly 450,000 stakeholders for its nearly 3.8 billion tradable shares in the stock market.
Lawyers in Beijing and Shanghai as well as Hebei, Guangdong and Zhejiang provinces have teamed up together to represent Wuliangye investors who suffered losses resulting from the company's information disclosure violations.
Song Yixin, a Shanghai-based lawyer, said he has received files from up to 200 investors last year. So far, another several dozens have asked for help. But he said the exact amount of compensation his clients are seeking is still unclear.
Song has already filed a lawsuit against Wuliangye for two of his clients who have a total of 70,900 shares, worth 329,100 yuan, of the Sichuan-based company.
Zang Xiaoli, another lawyer in Beijing, told the Economic Information Daily that she now has at least 30 clients who are demanding several millions of yuan in compensation. The number of investors seeking action is rising, she added.
The previous record for a civil compensation lawsuit against a public firm was Shenzhen-listed Dongfang Electronic Co in 2007. About 7,000 investors sued the firm for losses of 442 million yuan. Dongfang has 272,400 stakeholders for 978 million tradable shares.
On May 27, Wuliangye was fined 600,000 yuan by the China Securities Regulatory Commission for releasing false, untimely and incomplete information. Eight executives were fined between 30,000 yuan and 250,000 yuan each.
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