Jianpu Technology faces class action lawsuit for alleged misleading statements

China-based Jianpu Technology Inc. is facing a class action lawsuit in the U.S. District Court for the Southern District of New York for allegedly making false and misleading statements and failing to disclose material adverse facts about its business and operations.

The Law Offices of Frank R. Cruz filed the lawsuit on behalf of persons and entities that purchased Jianpu Technology's American depositary shares between May 29, 2018, and Feb. 16, 2021.

The complaint alleged that Jianpu Technology failed to inform investors that transactions made by the company's credit card recommendation business unit involved undisclosed relationships or lacked business substance, which resulted in the overstatement of its revenue, costs and expenses for fiscal years 2018 and 2019.

The lawsuit came after an independent audit committee of Jianpu Technology's board of directors conducted a review of transactions between the company and third-party entities. The review found that some employees of the company's credit card recommendation business unit may have been aware of, or involved in, tampering with documents so as to make larger commissions.

Jianpu Technology's share price fell 13% to close at $3.94 per share on Feb. 16 on unusually heavy trading volume, according to the press release.