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Cepton Inc. faces a proposed class action in Delaware's Court of Chancery from a stockholder who claims the lidar tech firm was sold for far less than it was worth in a $125.4 million acquisition by Japan’s Koito Manufacturing Co.

Investor James Ding alleges Cepton’s leadership, including CEO Jun Pei and four directors, breached their fiduciary duties by approving Koito’s $3.17-per-share offer despite internal estimates valuing shares as high as $7.42. The suit, originally filed under seal May 12 and amended last week, also names Craig-Hallum Capital Group as a defendant, accusing the investment bank of undervaluing the company to protect its deal fee.

Koito, a major auto lighting manufacturer, had already invested $200 million in Cepton and held a 30% voting stake along with two board seats at the time of the Jan. 7 merger. Ding argues this control discouraged other bidders and skewed the deal process.

The complaint says Koito asked for a board-level special committee to evaluate a buyout in October 2023—but the offer price never changed. By accepting that price, Ding alleges, the board ignored stronger valuation data, including projections suggesting a fair price closer to $6.86 even under conservative scenarios.

Named defendants include Pei; directors Jun Ye, George Syllantavos, Mei Wang, and Xiaogan Zhang; and Craig-Hallum, which advised both the SPAC that took Cepton public in 2021 and the later merger committee. The lawsuit claims Craig-Hallum had a financial incentive to ensure the deal closed, even if it meant backing a lowball valuation.

Ding also alleges material disclosure failures in the company’s proxy, including the omission of key management forecasts from February 2024. Koito allegedly relied on a weaker June forecast to justify sticking with its initial bid, a detail shareholders weren’t given the chance to weigh.

The suit further accuses Craig-Hallum of manipulating valuation metrics, including cherry-picking financial comparisons that produced “wildly disparate” outcomes.

Cepton debuted on the public market in August 2021 via a SPAC merger with Growth Capital Acquisition Corp., where Syllantavos served as CFO. Its stock steadily declined, closing at $2.53 just months before the buyout.

Ding is represented by attorneys from Cooch & Taylor PA, Monteverde & Associates PC, and Wohl & Fruchter LLP. Neither Cepton nor Craig-Hallum have commented on the suit.

The case is James Ding et al. v. Jun Pei et al., No. 2025-0519, in the Delaware Court of Chancery.