Hagens Berman

Court Denies Sasol’s (NYSE:SSL) Motion to Dismiss Securities Class-Action Lawsuit

Last week, a federal judge greenlighted a securities fraud class-action lawsuit against South African-based energy company Sasol Limited (NYSE: SSL) and five of its former executives, for misrepresentations and omissions about rising costs and construction delays at a mega-chemicals facility Sasol was building in Louisiana, according to attorneys at Hagens Berman.

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Mar. 10, 2015 – Jan. 13, 2020

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U.S. District Judge for the Southern District of New York Hon. Jed S. Rakoff denied in large part the defendants’ motion to dismiss. The opinion held that the lead plaintiff’s complaint sufficiently pleads that the alleged misconduct violates Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The suit was originally filed on Feb. 5, 2020.

The suit calls into scrutiny the actions of Sasol, along with former CEO David Edward Constable, former joint CEOs Bongani Nqwababa and Stephen Cornell, CFO Paul Victor and former executive vice president Stephan Schoeman. These defendants must now file an answer, admitting or denying each of the complaint’s allegations. The court also subsequently entered an order paving the way for the suit’s lead plaintiff and class members – investors who purchased Sasol American Depository Receipts (ADRs) between Mar. 10, 2015 and Jan. 13, 2020, inclusive – to be ready for trial on May 3, 2021.

In the 26-page motion to dismiss opinion, Judge Rakoff upheld investors’ claims based on defendants’ misrepresentations about the cost and construction for the Lake Charles Chemicals Project (LCCP). Specifically, the court rejected defendants’ argument that their statements were protected by the Private Securities Litigation Reform Act’s safe harbor provision, finding that the complaint adequately alleges that defendants’ cautionary language of potential cost overruns and delays was not meaningful and that defendants had actual knowledge of the falsity of their statements.