Nvidia shareholders have filed a class action lawsuit in a federal court in San Jose against the company and its chief executive, Jensen Huang. The investors accuse the corporation's management of failing to disclose information which, in their view, could have affected the share price, reports Reuters.
The case concerns Huang's alleged relationship with Alice Huang, the former head of the Singaporean company Megaspeed. US authorities suspect her of having links to Chinese intelligence. The plaintiffs claim that these circumstances could have posed risks to US national security and damaged Nvidia's reputation and business.
After reports of the scandal emerged on 9 November, Nvidia shares fell by 4.3%. The company's market capitalisation shrank by approximately $190 billion.
On 8 November, Nvidia's board of directors announced the launch of an independent investigation into Huang. The company stated that it currently has no grounds to believe that US national security or Nvidia's trade secrets have been put at risk. Huang promised to cooperate with the investigators.
The plaintiffs, led by investor Mark Kistenmacher, are seeking damages, although the lawsuit does not specify the amount of compensation.
After the media reported on what had happened, the head of Nvidia wrote a letter to employees and apologised to his wife and colleagues:
“To my wife and family: I love you. I know an apology cannot undo what I have done. I hope our family will heal and that, over time, I can earn back your trust.”
He also added that he had never shared sensitive information with Alice Huang, that he loves “the country and the company”, and that he does not intend to step down as Nvidia's chief executive during the investigation.
China's Ministry of Foreign Affairs rejected reports of possible involvement by Chinese intelligence in the scandal. The ministry's official spokesperson, Guo Jiakun, stated that such accusations are completely groundless.
The espionage allegations against Alice Huang have not yet been proven, and the investigation is ongoing.
