Directors and Officers Prevail in Securities Fraud, Derivative Challenges to China Automotive’s Accounting Practices

Reprinted with permission from Westlaw Journal.

The directors and officers of China Automotive Systems Inc., a publicly traded Chinese reverse-merger company, recently secured significant victories in related federal securities fraud and shareholder derivative actions challenging the company’s accounting treatment for certain convertible notes it issued Feb. 15, 2008, that contained a compound embedded derivative component.