Chinese actress and investor Zhao Wei and her husband Huang Youlong may face a huge amount of compensation claims by investors for their market violations, reports the Beijing Youth Daily.
The couple has been banned from China's securities markets for five years for attempting to acquire a listed company using a shell entity, as well as misleading the market and investors by making untrue announcements.
At least ten lawyers across China have started recruiting investors who lost money due to Zhao's proposed acquisition.
According to the statement made by the lawyers on Tuesday, they are preparing a collective lawsuit on behalf of the investors.
Song Yixin, a renowned finance lawyer in Shanghai, said considering the number of investors affected in the case, the final compensation amount they claim could be quite substantial.
Xu Ming, a lawyer in Beijing, said the investors can claim compensation by filing a civil lawsuit. The final compensation will be decided by the court based on the number of investors, the amount of money involved and many other factors.
China Central Television quoted a lawyer called Li Jian in Zhejiang in a report on Monday, saying that about 100 investors have consulted him for compensation claiming issues. Their losses range from tens to hundreds of thousands of yuan, said Li, adding that many law firms have expressed their willingness to offer free legal services to the investors.
Zhao Wei's company, Longwei Culture and Media, had been planning to acquire a 30-percent stake in Zhejiang Wanjia Co., a Shanghai-listed company, since late 2016 but dramatically reduced the acquiring scale due to a financing failure. The deal was finally aborted in March, causing significant fluctuation in the share prices of Zhejiang Wanjia.
In addition to the market ban, the China Securities Regulatory Commission (CSRC) also issued Zhao Wei, Huang Youlong and Zhao Zheng, the legal representative of Longwei, a 300,000-yuan (around 45,180 US dollars) fine each. Longwei was slapped a fine of 600,000 yuan.
According to a statement of Huang's company, Huang Youlong and Zhao Zheng have planned to appeal against the CSRC decision.
The CSRC will review the facts, reasons and evidence the applicants provide and make a formal administrative penalty decision accordingly if the appealing requests are considered reasonable, said the statement.