Update: Veolia´s stock ´artificially inflated,´ lawyer says
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By Vince Bond Jr. | WRN reporter
Jan. 27 — Veolia Environnement S.A. is facing class action lawsuits after allegedly making false and misleading statements about its operations and prospects, according to a complaint filed in the United States District Court, Southern District of New York.
Several law firms filed securities class action lawsuits on behalf of people who purchased American Depositary Shares of Veolia Environnment between April 27, 2007, and Aug. 3, 2011.
Shareholders who bought Veolia securities during that time have until Feb. 27 to ask the court to appoint them as a lead plaintiff in the case.
David Rosenfeld, a partner of Robbins Geller Rudman & Dowd, said anyone who purchased shares and lost money has the opportunity to act as the lead plaintiff to represent the shareholders.
Rosenfeld said shareholders were investing in Veolia while the company provided false information. Once Veolia reported its true financial state, the stock price declined, Rosenfeld said.
“The stock was artificially inflated,” he said. “Now the stock is properly valued.”
According to the complaint, the company “lacked adequate internal and financial controls” and made statements that “were materially false and misleading at all relevant times.”
At least eight U.S. law firms are looking into joining the suit, which may take years to resolve, Rosenfeld said.
Veolia representatives did not return phone calls seeking comment.
Veolia´s stock price has eroded in the last year, trading at about $ 10.50 a share on Jan. 19, a huge drop from its 52-week high of $ 33.86.
The Paris-based company has a hand in industries around the world, including wastewater services, waste management, heating and cooling and rail and road passenger transportation systems.
In the complaint, the law firm wrote that Veolia was “materially overstating its financial results by engaging in improper accounting practices” and that “the company failed to timely record an impairment charge for its transport business in Morocco, environmental services in Egypt, marine services in the United States and for southern Europe.”
On Aug. 4, Veolia said it had an operating income of 252.2 million euros (about $ 325.6 million) compared to 1.1 billion euros (about $ 1.4 billion) during the same period in 2010 after “nonrecurring writedowns amounting to 686 million euros (about $ 886 million) [principally in Italy, Morocco and the United States],” the lawsuit says.
The company revealed that it had discovered accounting fraud in its marine services division, where earnings between 2007 and 2010 were inflated by at least 152 million euros (about $ 196 million).
Contact Waste & Recycling News reporter Vince Bond Jr. at [email protected] or 313-446-1653.
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