| NEW YORK, July 31
NEW YORK, July 31 JinkoSolar Holding Co
must face a shareholder lawsuit accusing the Chinese solar panel
maker of concealing that one of its factories was dumping toxic
waste into a nearby river, a U.S. appeals court ruled on
The decision by the 2nd U.S. Circuit Court of Appeals in New
York overturned a lower court's January 2013 dismissal of the
case against JinkoSolar and its underwriters, sending the
lawsuit back to U.S. District Judge Paul Oetken.
The appeals court said JinkoSolar's failure to disclose
"ongoing, serious pollution problems" in prospectuses for two
stock offerings in 2010 "rendered misleading" statements about
its other efforts to comply with Chinese environmental laws.
JinkoSolar's share price fell 40 percent over three trading
days in September 2011 after hundreds of people gathered at its
plant on the outskirts of Haining, in China's Zhejiang province,
whose pollution they claimed was killing fish in a nearby river.
Some protesters overturned vehicles and damaged nearby
buildings before riot police dispersed the group.
JinkoSolar's American depositary shares were down $1.08, or
4.1 percent, at $25.17 in morning trading. The company and its
law firm did not immediately respond to requests for comment.
In a prospectus for its May 2010 initial public offering,
JinkoSolar had described having installed equipment at its
plants to lower pollution, and hired 24-hour-a-day environmental
monitoring teams to ensure compliance with Chinese standards.
But shareholders said JinkoSolar's failure to reveal the
pollution it was creating made its other statements misleading,
constituting securities fraud.
Writing for a three-judge 2nd Circuit panel, Circuit Judge
Ralph Winter said JinkoSolar could have disclosed more, even if
its prospectuses "gave comfort" to investors that it was trying
to comply with environmental regulations.
"These descriptions did not guarantee 100% compliance 100%
of the time," Winter wrote. "Such compliance may often be
unobtainable, and reasonable investors may be deemed to know
that. However, investors would be misled ... if in fact the
equipment and 24-hour team were then failing to prevent
substantial violations of the Chinese regulations."
Michael Bigin, a lawyer for the shareholders, said his
clients are pleased, and look forward to pursuing their case,
which seeks class-action status.
The case, which spells the company's name differently, is
Meyer et al v. JinkoSolar Holdings Co et al, 2nd U.S. Circuit
Court of Appeals, No. 13-616.
(Editing by Grant McCool)