PDF

ChinaCache International Holdings Ltd.

22 days left to seek lead plaintiff status

Case Summary

Company Name
ChinaCache International Holdings Ltd.
Stock Symbol
CCIH
Class Period
April 10, 2015 to May 17, 2019
Motion Deadline
August 11, 2019
Court
Southern District of New York

The complaint charges ChinaCache and certain of its officers with violations of the Securities Exchange Act of 1934.  ChinaCache is an investment holding company that provides content and application delivery services in the People’s Republic of China.  The Company offers a portfolio of services and solutions to businesses, government agencies, and other enterprises to enhance the reliability and scalability of their online services and applications.

The complaint alleges that throughout the Class Period, defendants made materially false and misleading statements and/or failed to disclose adverse information regarding the Company’s business and operations.  Specifically, defendants failed to disclose that ChinaCache and Song Wang (“Wang”) – the Company’s CEO and Chairman of the Board – were engaged in enterprise bribery, which placed ChinaCache and Wang at heightened risk of criminal investigation and enforcement action by government authorities and could foreseeably disrupt the Company’s operations.  As a result of this information being withheld from the market, ChinaCache securities traded at artificially inflated prices during the Class Period, with the price of its American Depositary Receipts (“ADRs”) reaching a high of more than $15 per share.

On April 29, 2019, ChinaCache disclosed it would delay the filing of its 2018 Annual Report on Form 20-F “because U.S. GAAP [Generally Accepted Accounting Principles] audited financial statements of the [Company] are not yet available.”

Then, on May 17, 2019, ChinaCache disclosed that the Company and Wang were under criminal investigation by a government prosecutor office in Beijing for charges of enterprise bribery and that Wang had resigned from his position as the Company’s CEO.  On this news, the price of ChinaCache ADRs fell $0.22 per share, or 20%, to $0.88 per share on May 17, 2019, before the NASDAQ halted trading in the ADRs at 11:12 a.m. Eastern Time.

Subsequently, on May 23, 2019, ChinaCache disclosed receipt of a NASDAQ Notification Letter concerning the Company’s failure to comply with NASDAQ listing requirements, citing the Company’s delay in the filing of its 2018 Form 20-F.  The letter also posed several questions to the Company regarding the resignation of its prior and appointment of its current independent registered public accounting firm and the allegations of enterprise bribery against ChinaCache and Wang.

On May 31, 2019, ChinaCache disclosed it had “terminated . . . [its newly appointed] independent registered public accounting firm,” stating that “[t]he decision was approved by the Company’s Audit Committee” and “[t]he Company intend[ed] to appoint a new auditor in the near future.” The Company also stated that “[t]he timing of the [Company’s] new auditor’s appointment is dependent on the status of its ongoing investigation.”

Finally, on June 6, 2019, ChinaCache issued a press release announcing the resignation of Wang from the Company’s Board of Directors.

Class Period: April 10, 2015 - May 17, 2019
Main Menu