Updated: March 8, 2019
Status: Ongoing Case
On March 8, 2019, Labaton Sucharow was appointed co-lead counsel in a securities class action lawsuit against JA Solar Holdings Co. Ltd and certain of its executives. The action asserts claims under Sections 10(b), 20A, and 20(a) of the Securities Exchange Act of 1934, and U.S. Securities and Exchange Commission Rule 10b-5 promulgated thereunder, on behalf of all former stockholders and former owners of JA Solar stock and ADS who sold shares, and were damaged thereby, during the class period.
On July 16, 2018, JA Solar, purported to be one of the world’s largest manufacturers of high-performance solar power products, completed a going-private transaction pursuant to the agreement and plan of merger dated November 17, 2017 by and among the parties. As a result of the merger, the company ceased to be a publicly traded company on the NASDAQ stock exchange.
Contrary to defendants' repeated reassurances about no substantial changes to its structures or relisting following the merger, only a few days after its delisting from the NASDAQ, it was announced that the controller of JA Solar had signed an “Important Assets Reorganization Intention Agreement” with Chinese-based company Tianye Tolian for the purchase of 100 percent equity of JA Solar via issuance of shares. This deal, operating as a “backdoor listing,” would allow JA Solar to return to the stock market by relisting on the Shenzhen Stock Exchange at a multiple, to the detriment of shareholders who unknowingly sold JA Solar’s stock and ADS at substantially deflated values during the class period as part of the scheme.
The complaint alleges that JA Solar shareholders were misled into accepting consideration from the merger that was well below fair value for their JA Solar shares. Specifically, defendants failed to disclose: (1) that the company’s Proxy materials misrepresented and/or omitted material information that was necessary for company shareholders to make an informed decision concerning whether to vote in favor of the merger; (2) that contrary to the representations in the Proxy, the company already had plans to relist its shares in China prior to closing the merger and its delisting from the NASDAQ; and (3) as a result, the company’s statements about its business, operations, and prospects lacked a reasonable basis.
The case is ODS Capital LLC v. JA Solar Holdings Co. Ltd. et al., No. 18-cv-12083 (S.D.N.Y.). Labaton Sucharow represents co-lead counsel ODS Capital LLC.