Datang Telecom Sued In Bejing Over False Statements And Internal Trading

Beijing No. 1 Secondary People's Court has accepted two lawsuits filed against Datang Telecom Technology Company Ltd.

One of the cases, according to a report from Chinanews.com.cn, is about a shareholder suing Datang Telecom over false statements, and the other is an accusation against Datang executive Pan Shenhai for internal trading.

In the first case, an investor surnamed Chen filed the lawsuits against Datang Telecom via Shanghai Xinwang Wenda Law Firm after learning the loss in the value of his stock in Datang Telecom was caused by the company's alleged false statements and internal trades. Chen is claiming compensation of CNY18504.38 for Datang Telecom's false statements and CNY17651.70 in compensation for the internal trades.

This is the second time that Datang Telecom has been accused of making false statements. In May 2006, the China Securities Regulatory Commission issued an administrative punishment letter which stated that Datang Telecom was involved in illegal activities by making a false report of its profit and omitted some major items in its 2004 fiscal report.

Pan, who previously worked as director and deputy general manager of Datang Telecom as well as auditor of Datang's Board of Directors and councilor of Datang's Supervision Commission, was also reportedly punished by CSRC in March 2008 for internal trading.

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