VNET (VNET) Loan and New Share Issuance Case

S.D. New York

Court

1:23-cv-11187

Case number

08 Apr 2022

Class period Start

15 Feb 2023

Class period End

26 Feb 2024

Lead Plaintiff motion deadline

VNET's co-founder, Josh Sheng Chen, used company shares as collateral for a loan in August 2021.
GenTao's default and Bold Ally announcement caused a drop in $VNET, and later, the issuance of new shares led to another $VNET decline. 
The first affected investor already filed the initial claim.
In August 2021, VNET's co-founder, Josh Sheng Chen, and his companies borrowed $50.25 million from Bold Ally, using his shares in GenTao and other companies as collateral. 

On February 13, 2023, Bold Ally declared its right to the collateral due to a default by GenTao, leading to a 3.2% $VNET drop and a further 17.8% decline the next day. 

On February 15, 2023, VNET revealed the issuance of 555,000 new shares with special voting power to the Executive Chairman to "protect the Company’s interests and continued stability," causing another 2% drop in $VNET.

Considering all the representations, investors have reasons to suspect that VNET didn't disclose GenTao's financial problems and the risk of default on the agreement. And that this omission hid the possibility of Bold Ally taking over Sheng Chen's stake, resulting in the issuance of new shares that diluted other investors' ownership.

Case Status

Lead Plaintiff Appointed

Alleged Offence

Mismanagement,

Misleading Statements,

Omissions

Suspected Party

Directors,

Management

Security Type

Depository Securities (ADS, ADR, GDR)

Trade Direction

Long

Shock Event Date

14 February 2023

Filing date

26 December 2023

Lead Plaintiff Deadline

26 February 2024

VNET (VNET) Loan and New Share Issuance Case

Collecting participants…