(Reuters) – South African petrochemical firm Sasol Ltd on Thursday confirmed it has agreed to pay $24 million to settle a class action lawsuit brought by U.S investors claiming it deliberately understated the cost of its Louisiana chemical plant project.
The lawsuit was brought by holders of Sasol securities who claimed the company had misled them by failing to disclose the true cost and schedule of its Lake Charles chemical plant, according to a statement posted on the website of U.S. law firm Hagens Berman which is representing the investors.
In October 2019, Sasol’s joint chief executives, Bongani Nqwababa and Stephen Cornell, left their positions as the company moved to repair the damage caused by the poor execution of the Lake Charles chemical project.
Costs of it rose from an initial $8.9 billion in 2014 to as much as $12.9 billion five years later.
A Sasol spokesperson confirmed the settlement to Reuters.
“Hagens Berman is pleased to announce a settlement with defendants totalling $24 million,” the U.S attorneys said.
A U.S district court gave a final order confirming the settlement on Aug. 19, according to the court documents, bringing a two-year legal battle to a close.
Attorneys for the investors argued the value of Sasol securities had plummeted when the cost of the Lake Charles Chemical Complex project was significantly increased, costing investors hundreds of millions of dollars.
In their claim, the investors said Sasol’s leadership at the time had on several occasions deliberately underreported the project’s cost to investors and the public, “in an effort to artificially prop up Sasol’s securities prices and trigger lucrative executive bonus packages”.
(Reporting by Nelson Banya; editing by Jason Neely)