Iasiaworks Named In Class-Action Lawsuit

[Hong Kong]Data center operator iasiaworks is being sued by an unnamed US investor claiming the company published misleading information about its operations in order to entice investors.

Law firm Weiss & Yourman has filed a class action suit on behalf of shareholders in New York state who purchased iasiaworks shares between August 3, 2000 and November 27, 2000, claiming that the company grossly understated the costs of building new data centers.

The suit also claims that investors were led to believe that proceeds from the company’s IPO would be sufficient to cover the costs of establishing those new data centers. The company borrowed US$18.4 million in November of last year to help finance data center construction.

Defendants named in the suit include the company’s directors as well as Goldman Sachs & Co., Morgan Stanley & Co., Inc., and Salomon Smith Barney, Inc.

In a statement issued by the company, iasiaworks noted that the lawsuit is without merit and that it intends to defend against it vigorously.

Iasiaworks stock was down yesterday 6.52 percent from 2.5.

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