China Life Insurance has announced that it will "vigorously" contest a class action lawsuit filed against it by US law firm, Milberg Weiss.
According to the complaint filed by Milberg Weiss at the US District Court for the Southern District of New York last Tuesday, China Life failed to provide adequate disclosure with regard to the "massive financial fraud" and "criminal acts" (allegedly including embezzlement and the issuing of fraudulent premium payments) which took place at its unlisted parent firm, China Life Insurance Co. before the new firm issued American depositary shares on the New York Stock Exchange in late 2003.
"China Life's share price would be tied to the illegal acts already known to the defendants, two-thirds of whom were directors or executive officers and senior managers of the original China Life," Milberg Weiss alleged, continuing:
"As a result of the defendants' false statements, China Life's stock price traded at inflated levels. The complaint seeks to recover damages on behalf of all purchasers of the company's publicly traded securities between December 2, 2003, and February 3, 2004, for alleged failure to make adequate disclosures relating to the audit report."
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