PHILADELPHIA, April 25, 2008 (PRIME NEWSWIRE) -- The law firm of Spector Roseman & Kodroff, P.C. announces that a class action lawsuit was commenced in the United States District Court for the Southern District of New York, on behalf of investors who purchased the American Depositary Receipts ("ADRs") of Agria Corporation ("Agria" or the "Company") (NYSE:GRO) pursuant and/or traceable to the Company's initial public offering on or about November 6, 2007 (the "IPO" or the "Offering").
The Complaint charges Agria Corporation and certain of its officers and directors with violations of the Securities Act of 1933. Agria engages in the research and development, production, and sale of upstream agricultural products in the People's Republic of China.
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 had failed to secure enforceable employment agreements with its Chief Operating Officer ("COO") and other key executives prior to its IPO; (2) that the Company was in active negotiations with its COO and other key executives to provide multi-million dollar compensation packages in order to secure their future services (which were key to the Company's future success); (3) that these dramatically increased compensation expenses would materially impact the Company's financial results going forward, specifically by increasing its general and administrative expenses, and decreasing its operating profit and margins; (4) that, as a result of the above, the Company's financial results following its IPO would in no way be analogous to the financial statements provided in its Registration Statement; (5) that the failure of the Company to successfully negotiate enforceable employment agreements with its COO and other key executives would significantly affect its ability to execute its stated operating strategies due to the executives' critical importance to the Company; (6) that various accounting and payment issues, which existed at the time of the IPO, would subsequently prohibit the Company's auditors from completing its audit of the Company's financial statements; (7) that the Company lacked adequate internal and financial controls; and (8) that, as a result of the foregoing, the Company's Registration Statement was false and misleading at all relevant times.
On November 6, 2007, the Company conducted its IPO. In connection with its IPO, the Company filed a Registration Statement with the SEC. The IPO was a financial success for the Company and its selling shareholder, Brothers Capital Limited, as they raised more than $282 million by selling 17,150,000 of the Company's securities to investors at a price of $16.50 per share.
Then on April 7, 2008, after the close of the market, Agria shocked investors when it announced that its auditors were unable to begin their audit of the Company's financial statements for 2007 due to various accounting and payment issues. The Company warned that "given the substantial delay in the commencement of the audit process, there is a risk that the Company may not be able to file its Annual Report" on time, and retracted its previously provided guidance for the fourth quarter of 2007, and first quarter and full year of 2008. The Company also announced that its COO had resigned. Further, the Company disclosed for the first time that its Chief Executive Officer was actively involved in protracted compensation negotiations with the COO and other key executives. These executives stood to receive $18 million in cash and transfer of Company shares (which represented 22% of the Company) so as to "provide incentive for their continuing service and align their interests with those of the shareholders." As the Company noted, payment of cash and/or shares to the COO and other executives "as compensation and incentive for their past and continuing services in connection with the proposed transaction will likely result in material compensation charges to the Company in the period in which the payment is made."
Upon the release of this news, shares of the Company's securities declined $3.34 per share, or almost 38 percent, to close on April 8, 2008 at $5.46 per share, on unusually heavy trading volume. This closing price on April 8, 2008 represented a cumulative loss of $11.04, or 66.9 percent, of the value of the Company's shares at the time of its IPO just months prior. Plaintiff seeks to recover damages on behalf of class members.
If you purchased Agria ADRs pursuant and/or traceable to the Company's initial public offering, you may, no later than June 10, 2008, move to be appointed as a Lead Plaintiff in this class action. A Lead Plaintiff is a representative chosen by the Court that 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 sustained substantial losses in Agria ADRs during the IPO, 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 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 numerous 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, as well as 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 investors, consumers and companies.
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