Chip Part Maker AXT Sued Over China Regulation, Capacity Issues

Beijing-based AXT Inc. didn’t adequately disclose several key problems to US investors, including environmental violations and a facility fire that affected production levels of its electronics components, according to a new proposed class action.

A short-seller’s report on these and other issues caused AXT’s stock price to drop 35% on April 4, shareholder Craig Nowakowski says in his complaint, filed Monday in the US District Court for the Eastern District of New York.

The report by J Capital Research also cast doubt on the company’s property holdings and discussed Chinese regulators’ opposition to an AXT subsidiary’s proposed listing on the ...