By FDI Creative Services on 12/05/2017
Category: Security News

Alibaba must face renewed lawsuit over IPO: U.S. appeals court

NEW YORK (Reuters) - A U.S. appeals court revived a lawsuit accusing Alibaba Group Holding Ltd of defrauding shareholders by concealing a regulatory warning prior to its initial public offering about its ability to suppress counterfeiting on its websites.

FILE PHOTO: A sign of Alibaba Group is seen during the fourth World Internet Conference in Wuzhen, Zhejiang province, China, December 3, 2017. REUTERS/Aly Song

The 2nd U.S. Court of Appeals in Manhattan on Tuesday said a lower court judge erred in dismissing the complaint by holders of Alibaba’s American Depositary Shares and call options to buy those shares.

Shareholders claimed that Alibaba concealed a meeting on July 16, 2014, two months before the Chinese e-commerce company’s IPO, in which China’s powerful State Administration for Industry and Commerce threatened big fines if counterfeiting continued.

Reporting by Jonathan Stempel in New YorkEditing by Chizu Nomiyama

Our Standards:The Thomson Reuters Trust Principles.

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