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Case ID: 4084 | Stocks | 12/21/2004
Specifically, the complaint charges VimpelCom, Alexander V. Izosimov , and Elena A. Shmatova with violations of the Securities Exchange Act of 1934. More specifically, the Complaint alleges that the Company failed to disclose and misrepresented the following material adverse facts which were known or recklessly disregarded by the defendants:
(1) that VimpelCom was passing fifty percent (50%) of its revenues from its Moscow operations to its wholly-owned subsidiary KB Impuls, thereby improperly deducting fifty percent (50%) of Moscow revenues as expenses to VimpelCom; (2) as such, VimpelCom was only paying taxes on fifty percent (50%) of the Moscow revenues rather than on all revenues from its Moscow operations, including revenues passed onto KB Impuls; (3) that this improper deduction caused VimpelCom to artificially inflate its financial results by at least US$534 million for fiscal years 2001-2003; (4) that as a result of this, the Company's financial results were in violation of generally accepted accounting principles ("GAAP"); (5) that the Company lacked adequate internal controls; and (6) that as a result of the above, the Company's financial results were materially inflated at all relevant times. On December 8, 2004, the Company announced that it had received an act with preliminary conclusions of the review of VimpelCom's 2001 tax filing by its tax inspectorate, stating that the Company owed an additional 2.5 billion rubles which is approximately US$90 million in tax (plus 1.9 billion rubles or approximately US$67 million in fines and penalties). A large portion of this amount related to the deductibility of expenses incurred by VimpelCom in connection with the agency relationship between VimpelCom and its wholly owned subsidiary, KB Impuls, which held the GSM license for the city of Moscow and the Moscow region. The announcement caused shares of the Company's stock to fall $8.38 per share, or 21.78 percent, to close at $30.10 per share. At Lawcash.com, it is our goal to keep you informed about important legal cases, class actions and settlements. Our lawyers offer free legal evaluations in tort cases, class actions, personal injury, and other lawsuits because we are dedicated to helping you resolve your legal complaints. Other Stocks Cases of Interest A class action has been filed against Sharper Image Corporation (NasdaqNM:SHRP), certain of its officers and directors by stockholders who purchased the company's common stock between February 05, 2004 and August 04, 2004. The action claims that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company's securities. The stockholders seek to recover compensatory damages for the loss of value of their stock. A class action has been filed against Herley Industries, Inc. (HRLY), certain of its officers and directors by stockholders who purchased the company's common stock between October 1, 2001 and June 14, 2006. 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On September 15, 2005, the parties reached a tentative settlement in several class actions that had been filed against wireless interactive entertainment provider KongZhong Corporation (Nasdaq:KONG) and certain of its officers and directors by stockholders who purchased the company's American Depositary Shares between July 9, 2004, and August 17, 2004. The actions claimed that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company's securities. A class action has been filed against content management software provider Stellent, Inc. (Nasdaq: STEL) and certain of its officers and directors by stockholders who purchased the company's common stock between October 2, 2001, and April 1, 2002. |
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