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(The Chinese version of this article is available here: [article in Chinese])
NEW YORK – Lufax Holding Ltd. (NYSE: LU) shares plummeted nearly 14 percent after the company disclosed it had dismissed its auditor, PricewaterhouseCoopers (PwC), who had raised concerns about the company’s internal controls and potential undisclosed related-party transactions. The revelation has triggered a flurry of securities class-action lawsuits from multiple law firms representing investors who suffered significant losses.
"We're investigating whether Lufax intentionally violated applicable accounting rules and disclosure requirements when it comes to full transparency about related-party transactions," said Reed Kathrein, the Hagens Berman partner leading the firm's investigation.
The lawsuits allege that Lufax made false and misleading statements and failed to disclose that it had inadequate internal controls, leading to materially misstated financial results. The class period for the lawsuits covers investors who purchased Lufax securities between April 7, 2023, and January 26, 2025. The lead plaintiff deadline is May 20, 2026.
The controversy has cast a shadow over Lufax's financial reporting integrity, with PwC refusing to consent to the incorporation of its prior audit opinions in any future filings and stating that its audit opinions for 2022 and 2023 should no longer be relied upon. The dismissal of PwC and the subsequent legal actions signal a period of heightened scrutiny for Lufax, with potentially significant financial and reputational repercussions. Investors will be closely watching the legal proceedings and any further disclosures from the company regarding its internal controls and financial reporting.
This article is for informational purposes only and does not constitute investment advice.
