Wong 'not liable' for investors' losses
A court in Beijing ruled yesterday that Wong Kwong-yu, the jailed billionaire founder of Gome Electrical Appliances, did not need to pay for the losses incurred by two stock investors as a result of his conviction for insider trading.
But the plaintiffs' lawyer said dozens of other small investors planned to bring a new round of lawsuits against the retail tycoon.
Beijing No 2 Intermediate People's Court rejected yesterday the requests from two investors who asked for a total compensation of 6.5 million yuan (HK$8 million) from Wong. It was the first civil lawsuit brought against the former Gome chairman, once the mainland's richest man. Wong was sentenced in May 2010 to 14 years' imprisonment for insider trading, bribery and illegal business operations.
One of the plaintiffs, who is identified only as Li, originally sued over a loss of just 155 yuan from trading the stock of Beijing Centergate Technologies, where Wong was chairman of the board. Li later raised the compensation amount at least twice.
The court said the plaintiffs' losses occurred mainly because of the changes that took place in the company's operations at the time and were not a result of Wong's insider trading.
Zhang Yuanzhong, the plaintiffs' lawyer, said he would discuss with them whether to appeal. He said his firm had received submissions from more than 40 stock investors wanting compensation from Wong.
"The ruling in this case is a severe blow to the effort to win protection for the rights of small stock investors in China," Zhang said. He said he would represent the other 40 investors and bring their cases to court when the timing was right.