US court throws out PetroChina suit
Print Edition
A COURT in the United States has thrown out a class-action lawsuit against China’s state-run oil giant PetroChina Co arising from an alleged bribery scandal.
US District Judge Edgardo Ramos in Manhattan dismissed claims by PetroChina investors who accused the company and various officials, including former Chairman Jiang Jiemin, of deceiving them about its internal controls and governance.
An anti-graft campaign championed by Chinese President Xi Jinping has ensnared many officials at PetroChina and its parent China National Petroleum Corp, since 2013.
In the US lawsuit, investors accused the oil company and individual defendants of violating US securities laws by concealing “bribery, political corruption, and undisclosed related party transactions.”
The lawsuit sought to recoup losses suffered by purchasers of PetroChina securities between April 26, 2012, and December 17, 2013, attributable to declines in the company’s share price, as news about alleged wrongdoing went public.
Ramos, however, said that the plaintiffs failed to show that PetroChina made false statements about its corporate governance practices or its internal controls over financial reporting.
There was no showing that the individual defendants knew of or recklessly disregarded alleged corruption at PetroChina at the time, he said.
While the complaint “certainly suggests” that the Chinese government suspected wrongdoing by PetroChina officials, “plaintiffs never specify when that conduct occurred or how it rendered PetroChina’s public statements false,” Ramos said.
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