NEW YORK, Aug. 16, 2022 (GLOBE NEWSWIRE) -- Pomerantz LLP announces that a class action lawsuit has been filed against 1Globe Capital LLC (“1Globe”) and certain of its officers. The class action, filed in the United States District Court for the District of Massachusetts, and docketed under 22-cv-11315, is on behalf of a class consisting of all holders of Sinovac Biotech Ltd. (“Sinovac” or the “Company”) ( SVA) stock other than Defendants who sold shares between April 11, 2016 and February 22, 2019 (the “Class Period”), to redress the harm that Defendants’ fraudulent conduct has caused them to suffer under the Rights Agreement that Sinovac adopted on March 28, 2016 (the “Rights Agreement”).
If you are a shareholder who sold Sinovac shares during the Class Period, you have until October 17, 2022 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at [email protected] or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
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This federal securities class action arises out of Defendants’ fraud in connection with their battle for control of Sinovac, a biopharmaceutical company that focuses on the research, development, manufacturing, and commercialization of vaccines.
Since January 2016, competing sets of shareholders have been vying for control of Sinovac. Defendants are individuals and entities associated with 1Globe, a family investment office that is owned and controlled by Defendant Jiaqiang Li (“Li”). Li was Sinovac’s largest shareholders when 1Globe’s Chief Executive Officer made an offer in January 2016 to buy Sinovac for approximately $350 million. Li supported a competing group that sought to buy Sinovac for a higher price. Rather than provide this support in an open and transparent manner, Li and 1Globe used deceptive practices to advance their position. After Sinovac adopted the Rights Agreement on March 28, 2016, which contained a “poison pill” that limited the amount of Sinovac stock that a shareholder could acquire, Defendants made many intentionally false and misleading statements, and violated their statutory disclosure obligations under Section 13(d) of the Securities Exchange Act of 1934 (“Section 13(d)”), in order to conceal the extent and purpose of Li’s and 1Globe’s ownership of Sinovac stock.
In addition to misrepresenting the amount of Sinovac stock that Li and 1Globe owned, Defendants misrepresented their secret plan to act in concert with other shareholders to try to take control of the Company. While Sinovac knew that Li and 1Globe were acting in concert based on the Company’s private communications with them during the battle for control of the Company, this information was not known to public shareholders.
Plaintiff and the Class are Sinovac shareholders that have been caught in the middle of this battle between Sinovac’s management and 1Globe for control of the Company. While Plaintiff and the Class also seek to receive fair value if Sinovac is taken private, Defendants’ behind-the-scenes scheming impeded this effort. Instead, Defendants have caused Plaintiff and the Class substantial harm by making them lose their ability to collect at least millions of shares that they would have otherwise been entitled to under the Rights Agreement.
Even the purchase of a single share of Sinovac stock above the Rights Agreement’s 15% threshold constitutes a trigger event under the Rights Agreement. All of Li’s and 1Globe’s purchases of Sinovac stock that they made—or directed to be made on their behalf—after March 28, 2016, therefore triggered Sinovac’s poison pill.
Defendants’ intentionally false statements and omissions concerning the true nature of Li’s and 1Globe’s ownership of Sinovac stock caused the exchange (“Exchange”) under the Rights Agreement 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 as day 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.
If 1Globe and Li’s actions were disclosed publicly, as they were required to be under Section 13(d), Plaintiff’s 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 Plaintiff and 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.
Pomerantz LLP, with offices in New York, Chicago, Los Angeles, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomlaw.com
CONTACT:
Robert S. Willoughby
Pomerantz LLP
[email protected]
888-476-6529 ext. 7980
