SANTO DOMINGO.- Gildan Activewear Inc., a T-shirt maker with a factory in Dominican Republic, is facing the possibility of a $500-million class-action lawsuit over allegations executives pocketed millions by selling shares before news of problems at the company's plant in this country sent the stock plummeting, the Web site cbc.ca reports.

“German institutional investor Metzler Investment GMBH is the lead plaintiff in the proposed suit. It claims to have lost around $900,000 after information about the problems at the plant was released,” it said.

It reports on a statement of claim filed in Ontario Superior Court late last week, but made public Monday, where “Metzler alleged that Gildan CEO Glenn Chamandy and a holding company in his name made $95.2 million US selling shares between Aug. 9 and Dec. 5, 2007.”

Cbc.ca said chief financial and administrative officer Laurence Sellyn allegedly earned $802,827 Cdn selling shares on Dec. 20 and 21.“None of the allegations has been proven in court. Gildan, which hasn't yet been served with the lawsuit, didn't return calls seeking comment,” the publication said.

“Gildan knew or ought to have known the severity of the problems at the Dominican facility,” cbc.ca said, quoting plaintiff arguments, and that it “had a duty to promptly pass that information on to investors.”

"The defendants were reckless or, at a minimum, negligent in failing to realize that fact and in failing to prevent the misrepresentations alleged herein," the claim states. Accordingly, the defendants have violated their duties to the plaintiffs and to persons or entities similarly situated," it said, quoting the claim documents.

The Canada-based site said the claim on behalf of all class members is seeking $500 million in general damages and $5 million in punitive damages.

“The class action filed by law firm Siskinds LLP is brought on behalf of all persons who bought Gildan securities between Aug. 2, 2007, and April 29, 2008, and who held those shares on April 29,” cbe.ca said.