PetroChina hit by US class action law suit for failing to disclose graft probe
Class-action case filed in New York alleges the oil company misled investors by failing to disclose it was being probed for corruption
A US law firm has filed a class-action lawsuit in an American court against PetroChina and some of its executives for failing to disclose the corruption scandal affecting the oil giant and its state-owned parent, the China National Petroleum Corporation (CNPC).
Several former executives of PetroChina and CNPC are under investigation by the central government for corruption, including Jiang Jiemin , a former head of CNPC, PetroChina and the State-owned Assets Supervision and Administration Commission (Sasac). The investigation is believed to be linked to Zhou Yongkang , former security tsar and ally of fallen leader Bo Xilai .
Pomerantz Grossman Hufford Dahlstrom & Gross filed the lawsuit in the court of the Southern District of New York on behalf of all investors who bought US securities in the Chinese firm from April 26 last year to August 27, seeking unspecified damages from PetroChina and some of its executives, said a press release issued by the law firm.
PetroChina, listed in Shanghai and Hong Kong, has American depositary receipts traded in New York.
The plaintiffs have grounds for claiming they have been harmed
Although class-action lawsuits are not uncommon in the US, they should be regarded as important, said Daniel Roules, a Shanghai-based partner at US law firm Squire Sanders. "The damages will be based on the number of damaged investors, but class actions are always costly for a company. Even if PetroChina prevails, the costs of fighting the case will be high."