In the news: Class action against PetroChina, ChinaWhys founders arrested and Shanghai free trade zone extended

PetroChina faces class action suit

Pomerantz Grossman Hufford Dahlstrom & Gross has filed a class action law suit against PetroChina and some of its executives for failing to disclose a corruption scandal. Several former executives of PetroChina and the oil company's state-owned parent, the China National Petroleum Company (CNPC) are under investigation by the central government for corruption. Pomerantz filed the lawsuit in the court of the Southern District of New York on behalf of investors who bought securities from PetroChina between April 26 2012 and April 27 2012. PetroChina is listed in Shanghai and Hong Kong and has American depository receipts traded in New York.

Source: SCMP

It appears the corruption crackdown by China's new administration has made it across the Pacific. PetroChina will not be able to ignore the lawsuit as in the US the plaintiffs would then win by default. It is interesting that even though the misconduct transpired in China and the investors are in the US, they still have grounds to claim damages. It is likely that more of these class actions might come out as China's corruption crackdown continues. Some of the country's largest success stories might find themselves on the phone to crisis managers as their reputations fall.

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