JA Solar Holdings Co., Ltd.
- Company Name
- JA Solar Holdings Co., Ltd.
- Stock Symbol
- Class Period
- December 11, 2017 to July 16, 2018
- Motion Deadline
- February 19, 2019
- Southern District of New York
The complaint charges JA Solar and certain of its officers with violations of the Securities Exchange Act of 1934. JA Solar is a manufacturer of high-performance solar power products.
On November 17, 2017, JA Solar and its Executive Chairman and CEO, Baofang Jin (“Jin”), through his wholly-owned companies JASO Top Holdings Limited, JASO Holdings Limited, JASO Parent Limited, and JASO Acquisition Limited (together with Jin, the “Buyer Group”), entered into an agreement and plan of merger (the “Merger”), under which the Buyer Group would acquire all outstanding stock and American Depositary Shares (“ADSs”) of JA Solar in an all-cash transaction valued at $1.51 per share and $7.55 per ADS. The Merger was completed on July 16, 2018 and JA Solar shares were no longer listed on the NASDAQ.
The complaint alleges that JA Solar shareholders were misled into accepting consideration in the Merger that was well below fair value for their JA Solar shares. Specifically, the complaint alleges that between November 17, 2017 and February 1, 2018, in order to convince JA Solar shareholders to vote in favor of the Merger, defendants filed materially false and misleading Proxy Statements on Schedule 13E-3 with the SEC (together, the “Proxy”). The Proxy misrepresented and/or omitted material information that was necessary for Company shareholders to make an informed decision concerning whether to vote in favor of the Merger, including information regarding the fact that, prior to closing of the Merger and its stock’s delisting from the NASDAQ, the Company had plans to relist its shares in China. As a result of defendants’ misrepresentations, the prices of JA Solar stock and ADSs were artificially depressed, allowing defendants to avoid paying a fair price to JA Solar’s shareholders in connection with the Merger.
Then, on July 19, 2018, three days after the Merger had been completed, and contrary to the Company’s repeated reassurances that there would be no substantial changes to its structure or relisting following the Merger, it was announced that Chinese-based company Tianye Tolian would acquire JA Solar by purchasing 100% of the equity of JA solar via the issuance of shares. This type of deal, known as a backdoor listing, reverse takeover, reverse merger or reverse initial public offering, allows a privately held company to gain inclusion onto a stock exchange without having to meet the criteria for listing. Thus, JA Solar would be able to return to the stock market by relisting on the Shenzhen Stock Exchange, to the detriment of shareholders who unknowingly sold JA Solar stock and ADSs at substantially deflated values during the Class Period.