Actress Zhao Wei to play the villain in class action case
TV star may have to compensate 270 shareholders of Sunriver, formerly known as Zhejiang Wanjia, and pay up to 80 million yuan, or US$12.8 million
Billionaire Chinese actress Zhao Wei is likely to play a starring role in a court – this time not in a movie but in real life.
That is because more than 270 shareholders will join a class action to seek compensation for their losses in Sunriver, formerly known as Zhejiang Wanjia, which totaled over 20 million yuan (US$3.19 million).
Some suggested the compensation in the high profile class-action case might be as high as 80 million yuan.
Mainland media quoted Wang Zhibin, a lawyer at Bright & Young Law Firm which is representing the small investors, as saying the China Securities Regulatory Commission (CSRC) is serious about Zhao Wei and her husband Huang Youlong allegedly supplying misleading information linked to a takeover in 2016.
Wang said the victims are anxious to know what lies ahead in their claim for compensation. One week ago, the CSRC issued a Prohibition to Access the Market to Huang and his partner Zhao Zheng, who were prohibited access to the securities market for five years with a penalty of 300,000 yuan each.
As a result, Huang quit the board of Sino Golf Holdings as chairman and Zhao quit as the board director. Sino Golf was not involved in the Sunriver acquisition.
But the question is how much Huang and Zhao Wei will have to pay in compensation to the shareholders for their losses. In December 2016, Longwei Culture & Media, which was controlled by the two, proposed paying three billion yuan for a 29.1 per cent stake in Wanjia, then a little known animated company.
Wanjia surged about 20% after the generous offer before the couple decided to walk away in April 2017 when the share price tumbled – and it is now only half of what it was.
Lawyers for the victims suggested investors who owned shares between January 12, 2017, and April 1, 2017, and up until now be entitled to compensation. Based on the volume and turnover, they expect the claims to be not more than 80 million yuan.
One commentator noted that Zhao Wei played 29 different roles involving five official companies under Longwei Cultural and Media, with eight senior management roles related to 16 other companies.
It is expected the class action could last till 2019. So grab a chair and watch the reality show in this high profile case.