Investors of Chinese cosmetics manufacturer Yixian Holdings sued the company and their executives, as well as the company's largest external shareholder Gao Yicheng, alleged that they allowed misleading information to push the company's stock price.
According to BloomberI bought an independent investor in Yixian Holding US deposit vouchers.
Morgan Stanley, Goldman Sachs Group, Huaxing Securities (Hong Kong), and Yixian Holdings in November 2020 were listed as a co -defendant in other U.S. IPO.
Analysis believes that in addition to risk factors such as China's domestic regulatory tightening, geopolitical tensions and economic slowdown, the lawsuit has highlighted the Chinese technology and consumer stocks listed in the United States.A source of risk.
Yixian Holdings was a rising star among Chinese technology consumer companies. The company's US deposit certificate was listed on November 19, 2020. By February 2021Many, but then the management said that the business slowed down and the stock price plummeted. At the time of close, the stock price was 88%lower than the issue price.
Litigation documents stated that the defendant did not disclose any known trends or uncertainty that could cause business deterioration in accordance with US laws, which made it difficult to judge future performance based on the disclosed financial information.
Litigation documents wrote that in the first few weeks of listing and throughout 2021, Yixian Holdings already knew that its main brand Perfect Diary and Little ONDINE performed deteriorating.The complaint did not disclose the source of the information, saying that the defendant slowly began to disclose the information in the second half of 2021, and it was not until March 10, 2022 in the fourth quarter of 2021 and the annual performance.The disappointing performance of the two brands.
The lawsuit document said that the defendant "exaggerated the fact that Yixian Holdings became the leader of the Chinese beauty market", and Yixian Holdings continued to call these brands "health", "outstanding" and "stability"."Knowing but not disclosed that the sales of its core brands are declining, this deterioration may have a significant adverse effect on the company’s future performance."
In the lawsuit, the plaintiff stated that these major missing statements and omissions were "carried out in the case of knowing or major negligence. The purpose was to conceal the company's performance and growth prospects, so that artificially raised its securities prices."
The lawsuit stated that Gao Yan Capital mastered the major non -public negative information of Yixian Holdings, and sold nearly 7.8 million deposit certificates during the lawsuit.But the lawsuit does not show the details of these negative information.According to the data compiled by Bloomberg, Gao Yan Capital is still the largest shareholder of Yixian Holdings, holding 9.4%of the company's stock.
The plaintiff stated in the complaint that the IPO underwriter did not fulfill the "reasonable and due diligence of the authenticity and accuracy of the statement contained in the issuance documents."
