Robbins Geller Rudman & Dowd LLP Files
SAN DIEGO, May 14, 2022 (GLOBE NEWSWIRE) — The law firm of Robbins Geller Rudman & Dowd LLP announces that it has filed a class action lawsuit seeking to represent purchasers of First High-School Education Group Co., Ltd. (NYSE: FHS) American Depositary Shares (“ADS”) in or traceable to First High-School Education’s March 2021 IPO offering (the “IPO”). Started on May 11, 2022, the Early secondary education class action lawsuit – subtitled Dagan Investments LLC v First High-School Education Group Co., Ltd.#22-cv-03831 (SDNY) – accuses First High-School Education, some of its key officers and directors, and IPO underwriters and others of violating the Securities Act of 1933 .
If you have suffered substantial losses and wish to act as the lead plaintiff of the Early secondary education class action, please provide your information here:
You can also contact a lawyer JC Sanchez of Robbins Geller by calling 800/449-4900 or emailing [email protected]. Principal Applicant’s Requests for Early secondary education the class action must be filed with the court no later than July 11, 2022.
CASE ALLEGATIONS: First High-School Education provides tutoring services and operates private high schools in western China. During the week immediately preceding the IPO – from March 4, 2021 to March 11, 2021 – China held its annual “Two Sessions” parliamentary meetings, where China’s two main political bodies meet, discuss and reveal plans for Chinese policies involving economy, military, trade, diplomacy, education, environment and other issues. Unbeknownst to investors until after the IPO, Chinese government leaders present at both sessions’ meetings had proposed – and eventually passed – stringent regulations governing the education sector, with significant negative repercussions for the business, operations and financial outlook of First High-School Education.
More specifically, the Early secondary education the class action alleges that the IPO registration statement misrepresented material facts because the defendants failed to disclose the following adverse facts that existed at the time of the IPO: (i) that the new rules , regulations and policies to be implemented by the IPO The Chinese government following the parliamentary meetings of the two sessions was much more severe than what was represented to investors and posed a significant adverse threat to First High-School Education and its business ; (ii) that China’s proposed regulations and rules regarding private education would lead to a slowdown in government approval for the opening of new educational institutions, which would have a negative effect on First High’s enrollment and growth -School Education; and (iii) that, therefore, statements in the registration statement regarding First High-School Education’s historical financial and operating measures and alleged market opportunities did not accurately reflect First High-School Education’s business, operations and financial results. facts and trajectory of First High-School Education at the time of the IPO, and were materially false and misleading and lacked a factual basis.
Shortly after the IPO, media reported that attendees at the Two Sessions conference proposed tougher regulations to curb the for-profit education sector, such as regulations aimed at improving the quality of teachers, limit fee scams, reduce market abuse and reduce stress. that for-profit education companies had imposed on students in the Chinese education system.
On May 12, 2021, news reports revealed that the impending government crackdown on for-profit educational enterprises in China would be far more drastic and far-reaching than before. Sources said the planned rules would include measures such as banning on-campus tutoring classes, banning tutoring services during weekend hours and imposing fee-wide limits. Of the industry.
Then, on May 14, 2021, China’s State Council announced rules that it would further tighten regulations on compulsory education and training institutions. According to an article on fitchratings.com titled “Legal Changes in China’s Private Education: Growing Risks for K-12 Education Companies; Benefits for Higher Education Providers,” the new rules “aim to prohibit profiteering in compulsory education” and “expose K-12 school operators to increased regulatory risk and growth. of their income could slow down. . . until they get more clarity on how the changes will be implemented. Subsequently, on July 23, 2021, China unveiled a sweeping overhaul of its education sector, banning companies that teach the school curriculum from making a profit, raising capital, or going public. These drastic measures effectively ended any potential growth of the for-profit tutoring industry in China.
Two months later, on September 28, 2021, First High-School Education disclosed that its revenue for the first half of 2021 was RMB 231.9 million, a year-on-year increase of only 24, 8%, a sharp decline from 30.5% for the year – the year-on-year revenue increase for the first nine months of 2020 and the 32.5% year-on-year revenue increase for the whole of 2020. The following month, on October 13, 2021, First High-School Education issued a statement announcing that its chief financial officer, defendant Lidong Zhu, had resigned as chief financial officer. And on December 16, 2021, First High-School Education announced that it had terminated its KPMG auditor Huazhen LLP.
On April 5, 2022, First High-School Education announced that it had received a letter from the New York Stock Exchange (“NYSE”) stating that it did not meet NYSE listing requirements because its market capitalization total and its shareholders equity had fallen below compliance standards. The following week, on April 13, 2022, First High-School Education announced that its total revenue for 2021 was only RMB 400.2 million, representing a substantial deceleration in the second half of the year. The statement also said that total student enrollment at First High-School Education remained almost unchanged at 21,247 students at year-end, representing a paltry 3% year-over-year increase. the other, and that First High-School Education’s gross profit was down 18.1% during the year.
Finally, on May 3, 2022, First High-School Education filed a notice with the United States Securities and Exchange Commission stating that it would be unable to timely file its annual report on Form NT 20- f.
As of May 10, 2022, First High School Education’s ADSs closed below $1 per ADS – more than 90% below the price at which First High School Education’s ADSs were sold to the investing public just over a year. year before. At the time of filing this complaint, the price of Primary Secondary ADS remained significantly below the IPO price.
You can view a copy of the complaint by visiting the following link:
THE PRINCIPAL APPLICANT PROCESS: The Private Securities Litigation Reform Act of 1995 allows any investor who has purchased First High-School Education ADSs in the IPO or is traceable thereto to seek appointment as a lead plaintiff in the Early secondary education class action. A principal plaintiff is generally the plaintiff with the greatest financial interest in the relief sought by the putative class that is also typical and adequate of the putative class. A lead plaintiff acts on behalf of all other class members by directing the Early secondary education class action. The main plaintiff can select a law firm of his choice to plead Early secondary education class action. An investor’s ability to participate in any potential future upturn in the Early secondary education the class action does not depend on the status of principal plaintiff.
ABOUT ROBBINS GELLER RUDMAN & DOWD LLP: Robbins Geller Rudman & Dowd LLP is one of the world’s leading complex class action firms representing plaintiffs in securities fraud cases. The firm is ranked No. 1 in the 2021 ISS Securities Class Action Services Top 50 report for recovering nearly $2 billion for investors last year alone, more than triple the amount recovered by any other firm from plaintiffs. With 200 attorneys in 9 offices, Robbins Geller attorneys have secured many of the largest securities class action recoveries in history, including the largest securities class action recovery on record – $7.2 billion dollars – in In re Enron Corp. Dry. Litigation Please visit the following page for more information:
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