Sasol agrees to pay $24m settlement in US class action suit
Sasol on Thursday, 1 September, confirmed it has agreed to pay $24m to settle a class action lawsuit brought by US investors claiming it deliberately understated the cost of its Louisiana chemical plant project.
Source: Reuters/Siphiwe Sibeko
The lawsuit was brought by holders of Sasol securities who claimed the company had misled them by failing to disclose the true cost and schedule of its Lake Charles chemical plant, according to a statement posted on the website of US law firm Hagens Berman which is representing the investors.
In October 2019, Sasol's joint chief executives, Bongani Nqwababa and Stephen Cornell, left their positions as the company moved to repair the damage caused by the poor execution of the Lake Charles chemical project. Costs of it rose from an initial $8.9bn in 2014 to as much as $12.9bn five years later.
A Sasol spokesperson confirmed the settlement to Reuters.
"Hagens Berman is pleased to announce a settlement with defendants totalling $24m," the US attorneys said.
A US district court gave a final order confirming the settlement on 19 August, according to the court documents, bringing a two-year legal battle to a close.
Underreporting of project costs
Attorneys for the investors argued the value of Sasol securities had plummeted when the cost of the Lake Charles Chemical Complex project was significantly increased, costing investors hundreds of millions of dollars.
In their claim, the investors said Sasol's leadership at the time had on several occasions deliberately underreported the project's cost to investors and the public, "in an effort to artificially prop up Sasol's securities prices and trigger lucrative executive bonus packages".
Source: Reuters
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