More Chinese companies face lawsuits in the US

Although the US capital markets are the first choice for many Chinese firms raising capital, there are increasingly more US-listed Chinese companies being sued in American courts for allegedly supplying prospectuses and statements that contain incorrect or misleading information.

So far this year, there have been more than a dozen Chinese companies involved in class actions and the number is growing, according to O’Melveny & Myers, a US law firm.

The lawsuits are alleging a variety of complaints ranging from overstatements in companies' financial results and earnings prospects, to failure to reveal historic revenue and companies' operating assets to not giving clear warnings on their exposure to business risks. As a result of this lack of disclosure, investors are claiming share prices have dropped and they've lost money as a result.