Alibaba to pay $250m to settle lawsuit over pre-IPO warning on counterfeiting

Alibaba Group Holding Ltd said on Monday it will pay $250 million to settle a US lawsuit faulting the Chinese e-commerce company for concealing a regulatory warning about its ability to stop counterfeiting before it went public in 2014.

The lawsuit accused Alibaba of securities fraud for failing to disclose it had met with China’s State Administration for Industry and Commerce on July 16, 2014, two months before the company’s $25 billion initial public offering.

Alibaba’s American Depositary Shares slid 12.8 per cent on Jan 28-29, 2015, after the SAIC issued a white paper based on concerns raised at the meeting, saying many products sold on Alibaba websites were fake or infringed trademarks.

The white paper also said the SAIC delayed releasing its findings so the IPO would not be affected.

Monday’s proposed class-action settlement covers investors in Alibaba ADS and ADS options in the 4-1/2 months preceding the release of the white paper, which was later withdrawn. The accord, which requires court approval, also resolves claims against Alibaba officials including billionaire founder and Executive Chairman Jack Ma.

Alibaba denied wrongdoing. It said the settlement ends all pending securities litigation against the company, its executive officers and its directors.

In court papers, the plaintiffs’ lawyers called the accord “inherently fair, reasonable, and adequate,” citing potential hurdles in showing that Alibaba made false statements and intended to commit fraud.

The lawyers may seek up to 25pc of the settlement fund for legal fees, the papers show. They did not immediately respond to requests for additional comment.

The Chinese company has long faced accusations that its online platforms are a haven for counterfeiters, including in lawsuits by luxury brands such as Gucci and Yves Saint Laurent.

Alibaba, Amazon.com Inc, eBay Inc and other such companies have policies banning counterfeiting, and highlighted their investments to thwart the practice.

On April 3, US President Donald Trump ordered a crackdown on online counterfeiting, saying global transactions in fake and pirated goods could reach $500bn annually.

The case is In re Alibaba Group Holding Limited Securities Litigation, US District Court, Southern District of New York, No. 15-md-02631.

Comments

Death toll in Indonesia quake-tsunami tops 800

The death toll from a powerful earthquake and tsunami in Indonesia leapt to 832 Sunday, as stunned people on the stricken island of Sulawesi struggled to find food and water and looting spread. The new toll announced by the national disaster agency was almost double the previous figure. Indonesian vice-president Jusuf Kalla said the final number of dead could be in the "thousands." "It feels very tense," said 35-year-old mother Risa Kusuma, comforting her feverish baby boy at an evacuation centre in the gutted coastal city of Palu. "Every minute an ambulance brings in bodies. Clean water is scarce. The minimarkets are looted everywhere." Indonesia’s Metro TV on Sunday broadcast footage from a coastal community in Donggala, close to the epicentre of the quake, where some waterfront homes appeared crushed but a resident said most people fled to higher ground after the quake struck. "When it shook really hard, we all ran up into the hills," a ...

PM Khan had ended tolerance for corruption: Fawad Chudry

Information Minister Fawad Chaudhry on Sunday asserted that all state institutions stand by Prime Minister Imran Khan and are working together to lead the country toward development. While talking to journalists, Information Minister Fawad Chaudhry said that before Khan came to power, every politician thought that “corruption was their right”. However, PM Khan had ended tolerance for corruption after he assumed office, Chaudhry claimed. When people do not have money to buy medicines then how can a prime minister live lavishly?” said Fawad Chaudhry. “They [the previous government] had ordered cars worth Rs980 million for one SAARC conference,” Chaudhry said, adding that the maintenance expenditure of the cars amounted to Rs350m. He said that previous governments had left the country up to its eyeballs in debt by spending huge amounts of money on extravagance. The new premier was trying to repay this debt. He further said that the budget allocated to state institutions like Pakist...

Czech Republic footballer Josef Sural killed in auto crash in Turkey

Czech Republic international Josef Sural was killed and six other Alanyaspor players were injured Monday when their van crashed on the way home from a Turkish league soccer match. The 28-year-old Sural died in the hospital during emergency surgery, The six other players were reported to be in stable condition. Cavusoglu said Sural and his six teammates hired a private luxury van to return from a game at Kayserispor in central Turkey. The crash occurred near the entrance to the town of Alanya, on Turkey’s Mediterranean coast. Cavusoglu said the driver of the van was being questioned by police. “Our pain is huge,” Cavusoglu said. State-run Anadolu Agency said the van veered off the road and overturned. It identified the injured players as Wanderson Baiano, Steven Caulker, Isaac Sackey, Papiss Demba Cisse, Welinton Souza and Djalma Campos. He said Sural’s wife rushed to the hospital where he informed her of the player’s death. Sural had two young daughters, he said. Sural, a forw...

Pakistan News Urdu Fast

Search This Blog