According to the lawsuit, defendants’ intentionally false statements and omissions concerning the true nature of 1Globe, a family investment office that is owned and controlled by defendant Jiaqiang Li, and Li’s ownership of Sinovac stock caused the exchange, under the Rights Agreement of March 28, 2016 which included a “poison pill” limiting the amount of Sinovac shares that a shareholder could acquire, to be delayed by several years. If Li had fully disclosed his ownership of Sinovac stock, as he was required to do under Section 13(d), it would have been clear that the Rights Agreement was triggered by May 2016, at the latest. While Sinovac knew enough information starting in 2016, largely based on private correspondence, to determine that 1Globe and Li triggered the Rights Agreement, defendants hid the full extent of their ownership of Sinovac stock and their agreements in connection with the battle for control of the Company. Defendants therefore also tortiously interfered with Sinovac’s contractual obligations to its shareholders under the Rights Agreement.
Also according to the lawsuit, if 1Globe and Li’s actions were disclosed publicly, as they were required to be under Section 13(d), rights would have been exercisable based on that public disclosure, and an Exchange would have occurred based on that date. By misrepresenting the true nature of their ownership of Sinovac stock, defendants caused that date to be delayed almost three years, until February 22, 2019, resulting in the class losing their rights to acquire additional shares of Sinovac stock for all of their shares that they sold in the interim. While Sinovac should have implemented the Rights Agreement in 2016 based on the information available to it at the time, 1Globe and Li exacerbated the problem by violating their disclosure obligations under Section 13(d). Moreover, defendants caused the value of Sinovac stock to be artificially depressed by preventing the public from accounting for the value of defendants’ stake in Sinovac and their efforts to take control of the Company.
No Class Has Been Certified. Until a class is certified, you are not represented by counsel unless you retain one. You may select counsel of your choice. You may also remain an absent class member and do nothing at this point. An investor’s ability to share in any potential future recovery is not dependent upon serving as lead plaintiff.
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