The directors and officers of a company mining coal in Mongolia were named personally as defendants in a securities class action in Ontario. On the plaintiff’s motion for leave to bring the action, the court permitted the claim to proceed against the company, but not the directors and officers. Not so fast, said the Ontario Court of Appeal in allowing the claim against the individuals to go ahead.
In Rahimi v. SouthGobi Resources Ltd., shareholders claimed against SouthGobi Resources Ltd., two former CEOs and three Directors after the company restated previous audited financial statements. The company announced in a press release that the statements did not meet revenue recognition criteria, resulting in a share price drop.