Yingli facing class action suit in California for misleading statements
A class action lawsuit has been filed in California against Yingli Green Energy Holding Co Ltd (NYSE:YGE) for alleged violations of federal securities laws, law firm Pomerantz LLP said Wednesday.
The class includes all persons or entities that bought Yingli securities between March 18, 2014 and May 15, 2015. They claim that throughout that period the Chinese solar company has made false and/or misleading statements and failed to disclose material adverse facts about its business, operations and prospects.
More specifically, Yingli has failed to disclose that it had no longer been able to take loans from commercial banks to support its operations and that its inability to raise additional capital or make borrowing threatened its ability to continue as a going concern. Furthermore, the class alleges that the company has been inappropriately recognising revenue and had no reasonable prospects to collect on certain accounts receivable based on historical customer conduct. All in all, the class says Yingli’s statements about its business, operations and prospects were false and misleading and/or lacked a reasonable basis.
In March Yingli reported a loss of USD 88.7 million (EUR 78m) on revenues of USD 555.5 million and its shares lost 15%, falling to USD 1.99 on March 25. Then in May the company said there is "substantial doubt" that it can remain solvent. On May 18 its stock closed at USD 1.49.
The class action lawsuit has been filed in United States District Court, Central District of California. Recently Yingli said that the claims are “without merit” and stressed that it will continue to “vigorously defend” itself in the matter.