Lawsuit accuses IBM of collaborating with NSA and hurting business with China

Louisiana Sheriffs' Pension and Relief Fund says IBM should have revealed information sooner

IBM is being sued by a shareholder who believes that the firm's alleged co-operation with the NSA's online surveillance is causing sales in China to plunge.

The Louisiana Sheriffs' Pension and Relief Fund filed a lawsuit in which it accuses IBM of actions that have resulted in its market value dropping by more than $12bn (£7bn). IBM had previously lobbied in favour of a bill that would allow it to share the personal data of customers, including those in China, with the NSA.

Earlier this year government whistleblower Edward Snowden released documents revealing the extent to which the US authorities were snooping on citizens. The IBM case represents yet another example of US government surveillance stepping over national borders.

"The company knew but misrepresented or concealed from investors that the disclosures of its lobbying and its association with the Prism and NSA spying scandal caused businesses in China as well as the Chinese government to abruptly halt doing business with IBM, leading to an immediate, and precipitous decline in sales," the The Louisiana Sheriffs' Pension and Relief Fund said in a statement.

The case names IBM Chief Executive Virginia Rometty and Chief Financial Officer Mark Loughridge as defendants and claims the company should be held responsible for not revealing its links with lobbying groups and the NSA sooner. IBM has denied the claims against it and said it'll fight the charges.

"These allegations are ludicrous and irresponsible and IBM will vigorously defend itself in court," IBM's Doug Shelton said in a statement.

IBM shares dropped in value by over six per cent in October, reducing the firm's market value by almost $13bn (£8bn).