SouthGobi Provides Update on Ontario Class Action
HONG KONG, CHINA--(Marketwired - Nov 9, 2015) - SouthGobi Resources Ltd. (TSX:SGQ)(HKSE:1878) (the "Company" or "SouthGobi") announces today the interim decision of the Ontario Superior Court of Justice (the "Court") deciding two preliminary motions in the Ontario class action (the "Action") claiming damages under the Ontario Securities Act and at common law arising out of the Company's restatement of financial statements as previously disclosed in the Company's public filings (the "Restatement").
On or about January 6, 2014, Siskinds LLP, a Canadian law firm, filed the Action against the Company, certain of its former senior officers and former and current directors, and its former auditors, Deloitte LLP, in the Court in relation to the Restatement.
To commence and proceed with the Action, the plaintiff was required to bring preliminary motions to seek leave to commence the Action under the Securities Act (the "Leave Motion") and to certify the Action as a class proceeding (the "Certification Motion"). The Court rendered its decision on the Leave Motion on November 5, 2015.
The Court dismissed the plaintiff's Leave Motion as against each of the former senior officers and former and current directors of SouthGobi named in the Action on the basis that the "large volume of compelling evidence" proved the defence of reasonable investigation on the balance of probabilities and provided the basis for dismissing the Leave Motion as against them.
The Court granted the preliminary Leave Motion against SouthGobi on the basis that, at this stage, the plaintiff met the low legal standard of "reasonable possibility of success." In granting leave, however, the Court acknowledged the "... compelling evidence of the defendant company ... that may prevail at trial ..." The Court refused an award of costs for both the Leave and Certification Motions to the plaintiff.
The Company firmly believes that it has a strong defence on the merits and will continue to vigorously defend itself against the Action through independent Canadian litigation counsel retained by the Company for this purpose.
For more details in respect of the class action lawsuit, refer to the Company's Management Discussion and Analysis for the quarter ended March 31, 2014 available on SEDAR at www.sedar.com, and, in particular, the sub-section on "Contingencies - Class Action Lawsuit" of the "Regulatory Issues and Contingencies."
About SouthGobi
SouthGobi, listed on the Toronto and Hong Kong stock exchanges, is focused on exploration and development of its metallurgical and thermal coal deposits in Mongolia's South Gobi Region. It has a 100% shareholding in SouthGobi Sands LLC, a Mongolian registered company that holds the mining and exploration licences in Mongolia and operates the flagship Ovoot Tolgoi coal mine. Ovoot Tolgoi produces and sells coal to customers in China.
FORWARD-LOOKING STATEMENTS
Except for statements of fact relating to the Company, certain information contained herein constitutes forward-looking statements. Forward-looking statements are frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements are based on the opinions and estimates of management at the dates the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. These factors include any other statements that are not historical facts. Except as required by law, the Company undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change. The reader is cautioned not to place undue reliance on forward-looking statements.
Contact
SouthGobi Resources Ltd.
Investor Relations
Kino Fu
+852 2156 7030
kino.fu@southgobi.com
www.southgobi.com