Casino's Cnova targeted by U.S. class action
By Dominique Vidalon
PARIS Jan 22 (Reuters) - A U.S. law firm has filed a class action lawsuit against Cnova, the e-commerce arm of French retailer Casino, alleging violations of securities laws in connection with its November 2014 initial public offering (IPO).
The complaint filed by Glancy Prongay & Murray LLP on behalf of investors in a New York district court alleges Cnova failed to disclose its true situation in Brazil at the time of its IPO and that the Brazilian operations lacked sufficient controls.
It alleges Cnova in its IPO registration statement and between Nov. 19, 2014 and Dec. 18, 2015 - the period covered by the class action - overstated net sales and operating profit, and financial statements about its business and prospects "were materially false and misleading at all relevant times".
In an e-mail to Reuters, Cnova rejected the allegations.
"Cnova believes the allegations are without merit and the company intends to vigorously defends itself. The company has no further comment at this time," it said.
The suit is a new blow for Casino after Standard & Poor's last week threatened to downgrade its debt to junk status, citing a high debt burden and weakness in Brazil.
Casino declined to comment.
Casino's shares have been under pressure since mid-December, when its strategy and finances were criticised by research and investment firm Muddy Waters. Continuación...