In re MINISO Group Holding Limited Securities Litigation

Background

This securities class action concerns MINISO Group Holding Ltd. and American Depository Shares purchased or otherwise acquired between October 15, 2020 and July 26, 2022. Lead Plaintiff Nova Scotia Health Employees’ Pension Plan asserted claims against MINISO, four individual defendants, Puglisi & Associates, Goldman Sachs (Asia) LLC, and BofA Securities, Inc.

The Second Amended Complaint alleged that the defendants made false or misleading statements about three subjects: MINISO’s Retail Partner franchise-like store model; a post-initial-public-offering joint venture between MINISO and its chief executive officer, Guofu Ye, to develop a new headquarters; and MINISO’s reported business results. The claims included alleged violations of the Securities Exchange Act of 1934 and the Securities Act of 1933.

On February 23, 2024, the court granted the defendants’ motions to dismiss the Second Amended Complaint. The court held that Nova Scotia had not adequately alleged a material misstatement or omission, a strong inference of scienter—meaning that the defendants acted with the required knowledge or recklessness—or loss causation, meaning a connection between the alleged fraud and investors’ losses. The court allowed Nova Scotia to file a third amended complaint if it wished to do so.

Motion for Reconsideration

Nova Scotia asked the court to reconsider the dismissal. Reconsideration is an exceptional remedy generally limited to an intervening change in controlling law, new evidence, or a need to correct a clear error or prevent serious injustice. The court emphasized that reconsideration is not a way to reargue issues already decided or present new arguments.

Court’s Analysis

As to the alleged misstatements about the joint venture, the court reaffirmed that Nova Scotia had not shown that MINISO’s offering materials were required to disclose the later joint-venture transactions. The court also maintained its conclusions that the alleged land-contract issue did not satisfy the heightened pleading requirement for fraud claims and that the complaint did not plead facts supporting Ye’s alleged self-dealing.

As to the Retail Partner model, the court rejected Nova Scotia’s arguments concerning Chinese corporate-registry records, pre-class-period materials, and MINISO’s response to the Blue Orca report. The court stated that the records did not establish that MINISO directly owned and operated most of its stores in China and that the complaint did not adequately connect the cited materials to the alleged fraud during the class period.

As to scienter, the court held that the arguments about the independent appraiser, Ye’s alleged failure to recuse himself, the Blue Orca report, and credit reports did not identify overlooked law or well-pleaded allegations. The court noted that some of these arguments were not included in the complaint or had been raised for the first time in reply.

As to loss causation, the court rejected Nova Scotia’s arguments concerning the other named plaintiff, alleged corrective disclosures, Securities Act claims, and prior case law. The court maintained that the complaint did not plead a corrective disclosure connected to the alleged fraud and that the cited disclosures did not concern the alleged fraud.

Disposition

The court denied Nova Scotia’s motion for reconsideration. The court directed that the motion be terminated. It stated that Nova Scotia could file a third amended complaint by April 14, 2025; if Nova Scotia did not do so by that date, the case would be closed.