A federal judge in Manhattan on Tuesday dismissed a class action lawsuit alleging that a unit of CITIC Group Corporation, a massive state-owned Chinese investment company, facilitated securities fraud on the part of Puda Coal Inc.
Puda Coal was a U.S.–listed Chinese company that collapsed in an accounting scandal in 2011, triggering a slew of shareholder class actions and a U.S. Securities and Exchange Commission lawsuit. Puda Coal’s chairman, Ming Zhao, is alleged to have transferred the company’s most important subsidiary to himself and then forged documents to conceal the scheme from shareholders. As Barron’s reported, CITIC loaned money to Zhao before its collapse, but the investment giant wasn’t targeted in the SEC complaint.
