Apple has agreed to pay 490 million USD to settle a lawsuit that alleged Chief Executive Tim Cook defrauded shareholders by concealing falling demand for iPhones in China.
The preliminary settlement was filed on Friday with the U.S. District Court in Oakland and it required approval by US District Judge Yvonne Gonzalez Rogers.
Meanwhile, the iPhone maker and the plaintiffs filed the proposed settlement Friday in U.S. District Court in Northern California. Judge Yvonne Gonzalez Rogers still has to approve it.
The news came after Apple’s unexpected announcement on January 2, 2019 that the iPhone maker would slash its quarterly revenue forecast by up to $9 billion, blaming U.S.-China trade tensions.
Reportedly, Tim Cook had told investors on November 1, 2018, that although Apple faced sales pressure in markets such as Brazil, India, Russia and Turkey, where currencies had weakened, “I would not put China in that category. Our business in China was very strong last quarter.”
However, in 2019, Apple disclosed that its iPhone business in China was struggling and slashed its quarterly revenue projection for the first time in more than 15 years. Shares fell by 10 percent following the announcement, which wiped out nearly $75 billion in market value.
On this, the plaintiffs said Apple knew it was performing poorly in China and should have disclosed that earlier. Meanwhile, presently, the iPhone maker is attempting to become more competitive in China by offering rare discounts for iPhones in the world’s largest smartphone market. However, sales in China have been slumping for Apple.
