Silvercorp Lawsuit Against Chinastockwatch.com Dismissed

A Silvercorp Metals Inc. lawsuit against the website Chinastockwatch.com over alleged false information posted about the company was dismissed by a New York state court judge.

Silvercorp sued Chinastockwatch.com and Alfredlittle.com and their operators in September, accusing the sites of publishing false information to lower the company’s share price and profit on short sales. In a short sale, an investor sells borrowed shares, hoping to return them to the lender after buying the stock back at a lower price.

Anthion Management LLC in March filed a countersuit identifying itself as the author of an anonymous report on Silvercorp that was sent to securities regulators, auditors and journalists and later published on Chinastockwatch.com.

Justice Carol R. Edmead dismissed the countersuit last month and yesterday granted the defendants’ motion to dismiss the lawsuit, agreeing with Anthion’s argument that the defamation claim should be thrown out because the statements are “non-actionable, constitutionally protected opinion.”

“The content of the communications at issue, their tone and stated purpose show that Anthion was expressing its view that Silvercorp potentially committed accounting fraud,” Edmead wrote in her decision.

A voice-mail message left with Vancouver-based Silvercorp spokesman Jonathan Hackshaw seeking comment on the ruling wasn’t returned.

“Chinese companies who are not happy with critical reports need to specifically try to defuse the allegation in the reports, not to sue the authors,” Jon Carnes, a defendant in the case who published reports on Alfredlittle.com, said today in a telephone interview.

The case is Silvercorp Metals v. Chinastockwatch.com, 150374/2011, New York State Supreme Court (Manhattan).

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