Law firm says JA Solar’s Nasdaq stockholders were left out of pocket by ‘backdoor listing’ in Shenzhen

A New York-based legal practice is preparing a class-action lawsuit on behalf of shareholders in the formerly Nasdaq-listed Chinese solar company JA Solar.

Pomerantz LLP on Saturday published a call for participants in the action and said shareholders in the U.S.-listed company were left out of pocket when the Shanghai-based PV cell and module manufacturer merged with its holding company in July.

An announcement of the merger at the time stated JA Solar would be merged with JASO Acquisition in a $362 million deal which, by offering $7.55 per American Depositary Share would ensure U.S.-based stockholders would enjoy an 18.2% premium to the company’s closing price before the deal was announced.

July’s announcement stated JA Solar, which would delist from the New York-based Nasdaq exchange as a result, would become owned by an investor consortium.

‘Backdoor listing’ claim

However, Pomerantz claims the merger with JASO Top Holdings, JASO Holdings, JASO Parent and JASO Acquisition – giving an insight into the complex structure of the JA Solar business – was swiftly followed by an agreement with China-based Tianye Tolian, which purchased all of the issued stock in the merged company and listed it on the Shenzhen exchange.

The U.S. law firm says the listing in China has occurred at a multiple of the value offered to U.S. shareholders and deprived them of earnings via the resulting “backdoor listing”.

Infrastructure construction equipment manufacturer Qinhuangdao Tianye Tolian Heavy Industry Co. Ltd. is listed on the Shenzhen exchange but it is not clear whether that is the company highlighted in the Pomerantz lawsuit.

JA Solar has been contacted by pv magazine for its response to the allegation.