Beijing Financial Court applied extraterritorial provisions of mainland China’s Securities Law, Financial News reports
A mainland Chinese court has claimed jurisdiction over an investor lawsuit against a Hong Kong-listed firm for the first time, with the move likely to increase scrutiny of corporate disclosures.
Mainland investors filed the lawsuit with the Beijing Financial Court, alleging that an overseas-incorporated company had failed to disclose irregular loans, unauthorised guarantees and related-party transactions in 2017 and 2018, in violation of Hong Kong’s listing rules, according to a recent report by Financial News, a newspaper supervised by the People’s Bank of China.
The company, whose name was not revealed, was suspended from trading before being delisted in January 2021, leaving shareholders unable to dispose of their holdings.
More than 40 investors joined the litigation, the newspaper reported.