Canada’s RCMP is assessing an investigation of Silvercorp for alleged criminal violations of the Corruption of Foreign Public Officials Act, court documents show.
A New York law firm has launched a class-action suit against Silvercorp Metals Inc. (TSX: T.SVM, Stock Forum) (NYSE: SVM, Stock Forum) and three of its executives.
The class action suit, which was filed in a New York District Court on December 28, 2012, has been brought on behalf of people who bought Silvercorp shares between June 24, 2010 and September 13, 2011.
It alleges that Silvercorp violated U.S. Federal Securities laws by overstating the quality and quantity of its ore reserves at its Ying mine in China.
“When the truth regarding the quantity and quality of Silvercorp’s minerals production was disclosed, Silvercorp’s stock price fell, damaging investors, the suit alleges.
The defendants named in the suit include Silvercorp’s Chairman and Chief Executive Officer Rui Feng, President and chief operating officer Myles Gao, and chief financial officer Maria Tang.
Silvercorp is a Vancouver-based company, which operates four silver, lead and zinc mines in the Ying District in the western Henan Province of China. The company purports to be China’s largest primary silver producer. Its main revenue-generating asset is the Ying mine.
According to the court filing, the anti-corruption unit of Canada’s RCMP is assessing an investigation of Silvercorp for criminal violations of the Corruption of Foreign Public Officials Act.
However, Silvercorp and its executives are presumed to be innocent until such times as these allegations are tested in a court of law.
Trading at $4.70 on Friday, Silvercorp has a market cap of $802.5 million, based on 170.7 million shares outstanding. The 52-week range is $8.45 and $4.90.