PHILADELPHIA, April 18, 2008 (PRIME NEWSWIRE) -- The law firm of Spector Roseman & Kodroff, P.C. announces that a securities class action lawsuit was commenced in the United States District Court for the Southern District of New York, on behalf of purchasers American Depository Receipts ("ADRs" or "shares") and call options and sellers of put options of Harmony Gold Mining Company Limited ("Harmony Gold" or the "Company") (NYSE:HMY) (Nasdaq:HMY) between April 2, 2007 through August 7, 2007, inclusive (the "Class Period").
The Complaint charges Harmony Gold and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Harmony Gold is a gold producer that operates 22 individual mines and projects across the world. More specifically, the Complaint alleges that the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that the Company's costs had significantly increased throughout 2007; (2) that the Company had underreported these increased costs in its previously issued financial statements; (3) that the Company had experienced a significant decrease in gold production for the third quarter 2007 due to production problems at various sites, which had already materialized at the time its Class Period statements were made; (4) that the Company had failed to disclose the full impact that these production problems would have on the Company's financial and operational results; (5) that, as a result of the Company's understatement of its costs and its lower production for the quarter, the Company had understated its operating costs and overstated its net profit for the third quarter; (6) that, as a result of the foregoing, the Company's financial statements were materially false and misleading at all relevant times; (7) that the Company would be forced to take substantial charges in the fourth quarter 2007 to remedy such failures, causing the Company to report a net loss for the quarter; (8) that the Company lacked adequate internal and financial controls; and (9) that, as a result of the above, the Company's statements about its financial well-being and future business prospects were lacking in any reasonable basis when made.
On August 6, 2007, Harmony Gold reported preliminary financial and operational results for its fourth quarter and fiscal year 2007 (ended June 30, 2007). The Company warned that its financial results for the quarter were "expected to differ significantly from those of the three previous quarters as well as from the analysts' consensus." For the fourth quarter, the Company stated that it expected to report a headline loss of between 130 and 160 SA cents per share, compared with a headline profit of 58 SA cents per share for the third quarter. This quarterly loss was primarily the result of the Company recording significantly higher costs for the quarter, and included a 25 to 28 percent increase in the Company's total cash operating costs as a result of "the newly installed accounting software system that resulted in some of the March quarter's costs being captured in the June 2007 quarter." Thus, the Company had substantially understated its costs in previous quarters and was forced to take substantial charges in the fourth quarter to remedy such underreported costs. Additionally, the Company reported that its cost base had increased by 8 to 12 percent from the previous six months. Finally, the Company announced that its Chief Executive Officer had resigned, "with immediate effect."
On this news, the Company's shares fell $2.45 per share, or over 18 percent, to close on August 6, 2007 at $11.02 per share, on unusually heavy trading volume. The following day, the Company's shares declined an additional $1.57 per share, or over 14 percent, to close on August 7, 2007 at $9.45 per share, again on heavy trading volume. This closing price on August 7, 2007 represented a two-day decline in the Company's shares of $4.02 per share, or 29.8 percent, and a cumulative decline of $7.25 per share, or over 43.4 percent, from the value of the Company's shares at their Class Period high of $16.70 on April 25, 2007.
If you purchased Harmony Gold securities during the Class Period, you may, no later than June 16, 2008, move to be appointed as a Lead Plaintiff in this class action. A Lead Plaintiff is a representative, chosen by the Court, which acts on behalf of other class members in directing the litigation. The Private Securities Litigation Reform Act of 1995 directs Courts to assume that the class member(s) with the "largest financial interest" in the outcome of the case will best serve the class in this capacity. Courts have discretion in determining which class member(s) have the "largest financial interest," and have appointed Lead Plaintiffs with substantial losses in both absolute terms and as a percentage of their net worth.
If you have sustained substantial losses in Harmony Gold securities during the Class Period, wish to join this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel Robert M. Roseman toll-free at 888-844-5862 or via E-mail at classaction@srk-law.com for a more thorough explanation of the Lead Plaintiff selection process. If you have relatively small losses, your ability to participate in any recovery will be protected by the Lead Plaintiff(s), and you need take no affirmative steps at this time. For more detailed information about the firm please visit its website at http://www.srk-law.com.
Spector, Roseman & Kodroff, P.C., located in Philadelphia, Pennsylvania, concentrates its practice in complex litigation including actions dealing with securities laws, antitrust, contract and commercial claims. The firm is active in major litigation pending in federal and state courts throughout the United States. The firm's reputation for excellence has been recognized on repeated occasions by courts which have appointed the firm as lead counsel in numerous major class actions involving violations of the federal securities laws and the federal antitrust laws, and consumer fraud. As a result of the efforts of the firm, and its members, hundreds of millions of dollars have been recovered through judgments and settlements on behalf of thousands of defrauded shareholders and companies.
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