PETALING JAYA: Four law firms in the United States have filed class-action suits against Nasdaq-listed MOL Global Inc, which is one of the worst performers post listing.
Wire reports said that Gainey McKenna & Egleston, Robbins Geller Rudman & Dowd LLP, Glancy Binkow & Goldberg LLP and The Rosen Law Firm had filed the suits in the US District Court for the Southern District of New York seeking to recover damages for alleged violations of the federal securities laws.
Among others, the plaintiffs alleged that the defendant made false and/or misleading statements and/or failed to disclose that the company was overstating the revenue and profit derived from MOL Global’s business and operations.
The four are seeking to recover investors’ losses pursuant to MOL Global’s initial public offering (IPO) under the US federal securities laws.
Robbins Geller’s complaint alleged that under the rules and regulations governing the preparation of the registration statement, MOL Global was required to disclose at the time of the IPO that it lacked adequate financial reporting capabilities to timely and accurately report its financial results and forecasts.
It also alleged that MOL Global misstated its revenue and direct cost and other ancillary expenses in its Vietnam subsidiary, and that the shift from online to mobile gaming had decreased volume in the company’s online games portal, MMOG.asia, with the decrease being further compounded by technical delays in introducing and monetising new mobile games on its platform.
The plaintiff noted that MOL Global’s registration statement contained no such disclosures.
Glancy Binkow alleged that MOL Global failed to disclose that it would not be able to report its third-quarter 2014 financial results on Nov 21, as previously stated and thus as a result of the foregoing, its financial statements were materially false and misleading at all relevant times.
Shares in MOL Global had earlier in the week declined by 59% to US$1.69 (RM5.83), which is about 80% below its IPO price of US$12.50 (RM43.10) on its debut in the United States on Oct 9.
Trading in the shares had been halted since Nov 24 due to the delay in the release of its third-quarter results and the resignation of chief financial officer Allan Wong.
StarBiz reported yesterday that MOL Global’s single largest shareholder Tan Sri Vincent Tan Chee Yioun gave his backing to the company’s management and felt that the stock had been unfairly punished.
MOL Global shares have since recovered some of the losses and were last traded at US$3.95 in after-hours trading yesterday.