U.S. judge tosses graft cover-up suit against PetroChina
Thursday, August 6, 2015 at 10:28AM
Nicolas Torres in China, China National Petroleum Corporation, Edgardo Ramos, PetroChina, Zhou Yongkang

A U.S. federal judge dismissed a securities lawsuit against PetroChina Tuesday that alleged the company failed to disclose corruption it flagged for Chinese investigators and made misleading statements in two annual reports.

Judge Edgardo Ramos of Manhattan tossed the lawsuit after finding the allegations were too vague and determining that the plaintiffs failed to pinpoint any wrongdoing.

The lawsuit, filed in 2013, alleged that PetroChina officials violated U.S. securities laws by failing to disclose alleged bribery, corruption, and "undisclosed party transactions."

The suit tried to recoup losses incurred by purchasers of PetroChina securities from April 2012 to December 2013, claiming the losses were caused by news reports of alleged corruption.

PetroChina Company Limited securities trade on the New York Stock Exchange under the symbol PTR.

Judge Ramos said the complaint suggested that Chinese government officials suspected corruption at PetroChina. But he concluded that the plaintiffs failed to identify a specific case of wrongdoing.

The complaint was prompted in part by the 2013 arrest of the former general manager of China National Petroleum Corporation, Zhou Yongkang.

China National Petroleum Corp is the parent company of PetroChina.

Zhou, 72, who also served as a former domestic security chief, was sentenced to life in prison in June this year for corruption and other crimes.

The Chinese government reportedly seized more than $14.5 billion in assets from Zhou as part of its investigation multi-year investigation, an incident described in the investors' complaint.

Jude Ramos wrote that the complaint "does not indicate when this event occurred, nor does it specify when Yongkang undertook any acts of corruption, what they consisted of, or whether they had any connection to PetroChina whatsoever."

He also ruled that the investors could not tie the various events together or prove how the alleged misconduct made the company's statements false.

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Nicolas Torres is a reporter for Petro Global News, where a version of this post first appeared.

Article originally appeared on The FCPA Blog (https://www.fcpablog.com/).
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