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VNET.US
id: 922
VNET (VNET) Loan and New Share Issuance Case
S.D. New York
Court1:23-cv-11187
Case number04/08/2022
Class period Start02/15/2023
Class period End02/26/2024
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
Motion to dismiss
Alleged Offence
Mismanagement,
Misleading Statements,
Omissions
Suspected Party
Directors,
Management
Security Type
Depository Securities (ADS, ADR, GDR)
Trade Direction
Long
Shock Event Date
02/14/2023
Filing date
12/26/2023
Lead Plaintiff Deadline
02/26/2024