Microlender Qudian Hit With Lawsuits Claiming False IPO Information
A spate of law firms has filed class-action lawsuits against microlender Qudian for alleged false and misleading information in its initial public offering (IPO) documents.
Even before tightening measures in the Chinese microlending market, Qudian shares plunged after its CEO gave an interview in October suggesting the firm treated bad loans as charity, putting the firm’s stated bad loan ratio of 0.5% into question.
In late November, Chinese media reported that personal information of Qudian customers was allegedly compromised and being sold on the black market. Chinese regulators and police are investigating the potential data leak, Bloomberg reported citing people with knowledge of the matter.
The first lawsuit filed focuses on whether Qudian failed to disclose that “its loan collection practices were materially deficient and/or nonexistent as the Company treated bad loans as welfare, and...[whether] Qudian’s data systems and procedures were materially inadequate to safeguard sensitive borrower data against breach,” according to a filing from Faruqi & Faruqi LLP on Tuesday.
Since then, Rosen Law Firm, Kirby McInerney LLP; Holzer & Holzer LLC; Bronstein, Gewirtz & Grossman, LLC; Kaplan Fox & Kilsheimer LLP; and Johnson Fistel, LLP have also filed lawsuits against the microlender for the same reasons. The cases were filed in New York.
Qudian’s share price was $12.93 by the end of trading Friday on the New York Stock Exchange, nearly half of its IPO price of $24.00.
Qudian said the lawsuits have no foundation and that it will mount an active defense, Sina Technology, an online Chinese media outlet, reported on Thursday.
Qudian didn’t reply to Caixin’s request for comment.
Contact reporter Liu Xiao (firstname.lastname@example.org)
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