Shares of Chinese school operator Ambow Education (AMBO.NYSE) fell by more than 12% after its investors launched a lawsuit against the company for orchestrating a “fake acquisition” to boost its initial public offering in the US, Bloomberg reported. Investors in the company’s August 2010 IPO filed an amended complaint to federal courts in Los Angeles seeking unspecified damages. The plaintiffs allege that Ambow, which runs lower, middle and high schools, as well as colleges and career centers, falsely claims it had acquired Changsha Study School in 2008, when really it just paid “to borrow this school’s name and revenue for the IPO.”
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