(Yicai) April 1 -- Feilo Acoustics, a maker of lighting products, will need to pay over 2,000 investors CNY329 million (USD45.5 million) in compensation after losing China's first ordinary representative litigation regarding securities, completing a process of more than three years.

Over 2,000 investors who were led on by Felio's false financial reporting joined the pioneering class action lawsuit, according to the verdict published by the Shanghai Financial Court on WeChat yesterday.

The case started in August 2020 when 34 individual investors took action, enabled by China's new class action regime implemented in July 2020 to allow groups of investors to seek justice after corporate misconduct.

The domino effect began in 2017 when Shanghai-based Felio, one of the first eight firms to get listed on the mainland, wrongly claimed its revenue and income grew in an interim report published in August that year. Its shares rose for three straight trading days.

However, in April 2018, the firm said that reports of the first three quarters of 2017 contained accounting errors so operating income was instead set to fall, resulting in a share price slump by the limit for three straight days.

Editor: Emmi Laine