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UPDATE 1-U.S. court drops China Life poor disclosure suit

(Adds details, company’s comments, share action)

HONG KONG, Sept 4 (Reuters) - A U.S. court has thrown out a lawsuit against China Life 2628.HK by U.S. investors accusing China's biggest life insurer of failing to disclose sensitive information during its listing, the world's largest in 2003.

The 2004 class-action suit, which roughly coincided with an informal investigation by U.S. securities regulators, spooked investors at the time and helped sour market sentiment towards investment in China.

China Life 601628.SS said on Thursday the New York southern district court had dismissed the suit as lacking merit.

But it added in a statement: "The company does not rule out the possibility that the plaintiffs may seek reconsideration by the New York Southern District Court or to appeal the dismissal." here

U.S. investors had accused China Life of failing to disclose that a government audit of its state-owned predecessor company had unearthed accounting irregularities worth about 5.4 billion yuan ($789.8 million) up to 2002.

The listed China Life, formed in June 2003 by plucking healthier assets from its parent, raised $3.5 billion in December 2003.

Months after going public, the firm disclosed that its predecessor had been the subject of a regulatory probe and been suspected of making investments that violated Chinese laws.

Analysts said at the time the case highlighted shoddy disclosure among China’s largest state-owned corporations, depressing a market that had risen sharply alongside a national economic boom.

China Life's shares dipped 0.4 percent on Thursday, outperforming the market's .HSI near 1 percent slide. ($1=6.837 Yuan) (Reporting by Edwin Chan and Alison Leung, editing by Will Waterman)

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