According to a press release dated October 11, 2011, the Plaintiffs allege violations of the federal securities laws in connection with false statements released surrounding its IPO.
Based in the People’s Republic of China, the Company launched an IPO in the United States on May 13, 2010 issuing 5,835,000 ADSs to trade on the New York Stock Exchange, representing 23,340,000 ordinary shares. In the IPO Prospectus, Registration Statement, and subsequent SEC filings, the Company assured investors that it was in full compliance will all PRC environmental regulations.
Last month, after a massive die-off of fish in a river adjacent to the Company’s primary manufacturing facility in Haining, hundreds of local residents protested and eventually ransacked the facility. 31 people were detained by police, and the facility was shut for several weeks. The Company has since admitted that it was responsible for the environmental contamination and agreed to take remedial action. The Company admitted at a press conference, “we cannot shirk responsibility for the legal consequences which have come from management slips.” Following the disclosure of the contamination, the Company’s ADSs lost more than 42% of their value in a single week, wiping out millions of dollars of shareholder value.
On March 19, 2012, the Court approved the appointment of lead plaintiff and co-lead counsels.
On June 1, 2012, plaintiffs filed an amended complaint.
On January 22, 2013, the Court issued an Order granting the Defendants' motions to dismiss. The Clerk of the Court was directed to close this case.
On February 19, 2013, the lead plaintiffs filed a Notice of Appeal of the January 22 Order. One of the plaintiffs voluntarily dismissed his appeal on March 25.
On July 31, 2014, the United States Court of Appeals, Second Circuit issued an Order vacating the dismissal of the complaint and remanding for further proceedings.
On September 15, 2015, the parties filed a Stipulation of Settlement. The Court preliminarily approved the Settlement two days later.