Fined for stock manipulation, Zhao Wei now risks lawsuit
BEIJING: Actress-director Zhao Wei faces the possibility of a class action lawsuit against her and her husband for manipulating the securities market.
The possible suit is being handled by the Shanghaibased Bright & Young law firm, according to the South China Morning Post.
It follows the decision last week by the China Securities Regulatory Commission to ban Zhao and her husband Huang Youlong from securities markets for five years. Both were also fined some US$45,000 (RM189,000).
The case follows a failed US$455 million bid by the pair, through their Longwei Culture & Media, for a 29 per cent stake in Hangzhou-based animation firm, Zhejiang People Culture. The pair bought five per cent of the target company, but Longwei withdrew its offer in January when it failed to raise adequate bank finance. People Culture shares crashed. Some 4,500 people are reported to have contacted Bright & Young claiming losses caused by the failed bid.
The law firm cannot proceed with a suit until the CSRC has heard an appeal from Huang. The owner of People Culture was also fined. The company was subsequently taken over by another company and has been renamed as Sunriver Culture.
Zhao, one of China’s most popular and prominent actresses, may also be one of the world’s richest. Thanks to an early stake in Alibaba Pictures Group, as well as other financial dealings, she and her husband have a net worth that at one time exceeded US$1 billion.