7,195 investors win total compensation of 39.5 mln USD in China securities lawsuit

SHANGHAI, Dec. 26 (Xinhua) -- A total of 7,195 investors on Tuesday won more than 280 million yuan (about 39.5 million U.S. dollars) in compensation in a securities class action lawsuit in Shanghai.

It is the first settlement in a securities class action suit in China.

The China Securities Investor Services Center, which is a non-profit organization run by China's securities regulator and represents the 7,195 investors, was awarded full compensation in the settlement, according to the Shanghai Financial Court.

Each investor is now entitled to compensation, with the average figure at 38,900 yuan and the maximum at over 5 million yuan, the court said.

The investors sued 12 defendants, including Essence Information Technology Co., Ltd. and its actual controller, as well as various executives and intermediaries, over a liability dispute related to the misrepresentation of securities. In the lawsuit, they demanded their total losses of over 280 million yuan be recovered.

In April 2023, Essence Information Technology Co., Ltd. received an administrative penalty from the China Securities Regulatory Commission for concealing key facts and fabricating key information in securities offering documents, and for keeping false records and making major omissions in its annual reports.

The company has been delisted from the STAR market, China's Nasdaq-style sci-tech innovation board.