Business / Companies

Chinese distillery agrees to $2m compensation

( Updated: 2014-10-14 10:41

Chinese distillery agrees to $2m compensation

Chinese distillery agrees to $2m compensation
China's distillery Wuliangye agrees to offer 13.44 million yuan ($2.19 million) compensation to investors for an alleged "false statement", said the Shenzhen-listed company, bringing a five-year legal proceeding to an end.

It added that 141 investors, who earlier had filed a class-action suit against the company seeking over 19 million yuan, have accepted the settlement.

"The compensation is unlikely to constitute a significant impact on this fiscal year's profit," said the distiller on Sept 30, adding that the payment would be transferred within 15 days.

According to a report by the China Securities Regulatory Commission, management of Wuliangye was to blame for omitting or failing to immediately disclose several issues that could affect investors.

The company allegedly failed to disclose the 5.5 million yuan transferred through subsidiaries to finance securities investments and failed to immediately disclose its investment through a security company which later bankrupted

Wuliangye was also accused of withholding the information that Wang Zi'an, the then director of the company, was in judicial custody till more than a year later in 2008, according to the report of the CSRC.

The regulatory watchdog imposed a 1.49 million yuan fine on eight management of Wuliangye.

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