SHANGHAI (AFX) - Xinhua Finance Media, a unit of Xinhua Finance Ltd, said that it will defend itself 'vigorously' against a suit that has been filed against it in the US and described the court action as 'wholly without merit.'
It said the suit was brought by an individual who bought 100 shares in the company's US IPO and added that allegations in the suit appear to be based on factual errors drawn from a recent news article on the company.
It did not identify the publication but it was apparently referring to an article in Barron's, published by Dow Jones & Co.
The suit -- and the article -- allege that the IPO's offering prospectus failed to disclose material information about Shelly Singhal, who has subsequently resigned from the boards of the parent and subsidiary.
Nasdaq-traded Xinhua Finance Media (XFML) noted that the article alleged that the material information included a cease-and-desist order by the National Association of Securities Dealers against a broker dealer owned by Singhal.
Xinhua Finance Media said that the NASD withdrew the cease-and-desist letter on Dec 14 last year, prior to the IPO in March this year.
The company also said that the prospectus contained all material information required by US securities laws.
A company statement also quoted Fredy Bush, CEO of Xinhua Finance Media and Tokyo-listed Xinhua Finance Ltd (9399.TK), as saying that the fundamentals of Xinhua Finance are strong.
'I believe that the recent sell-off of shares does not reflect the performance of the businesses,' she said.
Xinhua Finance Ltd, a Shanghai-based provider of financial data, owns the Xinhua Finance newswire.
bjburo@xfn.com
It said the suit was brought by an individual who bought 100 shares in the company's US IPO and added that allegations in the suit appear to be based on factual errors drawn from a recent news article on the company.
It did not identify the publication but it was apparently referring to an article in Barron's, published by Dow Jones & Co.
The suit -- and the article -- allege that the IPO's offering prospectus failed to disclose material information about Shelly Singhal, who has subsequently resigned from the boards of the parent and subsidiary.
Nasdaq-traded Xinhua Finance Media (XFML) noted that the article alleged that the material information included a cease-and-desist order by the National Association of Securities Dealers against a broker dealer owned by Singhal.
Xinhua Finance Media said that the NASD withdrew the cease-and-desist letter on Dec 14 last year, prior to the IPO in March this year.
The company also said that the prospectus contained all material information required by US securities laws.
A company statement also quoted Fredy Bush, CEO of Xinhua Finance Media and Tokyo-listed Xinhua Finance Ltd (9399.TK), as saying that the fundamentals of Xinhua Finance are strong.
'I believe that the recent sell-off of shares does not reflect the performance of the businesses,' she said.
Xinhua Finance Ltd, a Shanghai-based provider of financial data, owns the Xinhua Finance newswire.
bjburo@xfn.com
© 2007 AFX News
