Shulou(Shulou.com)11/24 Report--

Beijing, April 12 (Xinhua) on Tuesday, an appeals court in the United States ordered a grass-roots court to retry a shareholder lawsuit against Hewlett-Packard. In this case, Hewlett-Packard is accused of fraudulently and misleading shareholders by quietly using unprofitable means to stimulate sales of printer consumables in 2015 and 2016, without accurately disclosing information.

According to reports, after the shareholder submitted the lawsuit, it was rejected by the grass-roots court on the grounds that the statute of limitations had expired. But on Tuesday, a judge of the United States Court of Appeals for the Ninth Circuit overturned the decision of the lower court.

In past petitions, HP shareholders said they were not aware of such illegal sales practices until September 2020, when the Securities and Exchange Commission (SEC) fined HP $6 million because the investigation found problems with the disclosure of HP's sales practices.

Darren Robbins, a lawyer for a pension fund that included the plaintiffs in the case, said the appeals court's decision was in favor of HP investors and that the nature of HP's actions was to prevent shareholders from discovering irregularities in the company's operations through misleading disclosure.

HP has not officially commented on the appeals court's decision.

SEC has launched an investigation into HP's violations. In a 2020 survey, SEC noted that some Hewlett-Packard regional managers had taken measures to boost sales revenue and judged that these measures would boost sales in subsequent quarters. Other sales managers violated the company's policy by offering discounted printer supplies across regions to other distributors, hurting HP's sales in the region.

SEC pointed out that the above illegal sales occurred in 2015 and 2016, and HP, as a public company, failed to disclose to investors in a timely manner how such sales could reduce inventory and affect profit margins.

Hewlett-Packard did not acknowledge or deny SEC's findings.

HP shareholders quickly filed a lawsuit after SEC and Hewlett-Packard reached a settlement over the investigation, accusing HP and management of fraudulent investors by concealing the impact of illegal sales practices on the company's performance.

According to reports, on June 21, 2016, Hewlett-Packard announced a plan to reduce distributor channel printer consumables inventory and predicted that the plan would reduce the company's sales revenue by $450 million over the next two quarters. HP shares fell 5.4% immediately after the plan was announced.

With regard to the initial shareholder lawsuit, a court in Oakland, California, ruled in March 2022 that shareholders had expired the statute of limitations and should have filed the lawsuit within two years of HP's announcement.

This time, however, the appeals court judge said that the grass-roots court judges ignored an important reason put forward by shareholders in the complaint, namely, the SEC investigation report, which gave "new background" to HP's past statements about sales practices, which showed that some of HP's ostensibly innocent statements were deliberately misleading.

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