Gadfly lawyer calls for probe, class action into Seazen’s disclosure as Chinese companies’ tardiness come under spotlight
- Seazen divulged the arrest of its founder and chairman on July 4 in China, two days after the disclosure deadline under Chinese securities rules, according to Yan Yiming, a lawyer who made his name two decades ago representing minority shareholders
- Between the public complaint that led to the arrest of Seazen’s chairman and the company’s disclosure, five transactions of the company’s stock valued at 144 million yuan were recorded, Yan said
A Chinese gadfly lawyer has sounded the clarion call for regulators to look into the tardiness of public disclosures, as a handful of Shanghai-listed companies have found themselves rudderless in recent days amid the city’s crackdown on crime.
“A class-action lawsuit against the company is likely, but we need to spend some time to make preparations,” Yan said in an interview with South China Morning Post in Shanghai, after writing an open letter to the CSRC urging a probe. “We are still awaiting the regulator’s reply to our letter.”
The call to action adds to Seazen’s woes, whose market value has plunged by 20 billion yuan (US$2.9 billion) in Shanghai, after the police arrested its founder and chairman Wang Zhenhua for allegedly molesting a nine-year-old girl following a complaint on June 30.
China’s securities regulations stipulate that market-sensitive information must be divulged and published within two days of an event, which means Wang’s arrest should have been disclosed in China on July 2, a trading day, Yan said.