Pomerantz Law Firm Reminds Shareholders of China Medical Technologies, Inc. of Upcoming Deadline - CMED
December 29 2011 - 4:54PM
Shareholders of China Medical Technologies, Inc. ("China Medical"
or the "Company") (Nasdaq:CMED) are reminded of the securities
class action lawsuit filed against China Medical and certain of its
officers. The class action (11 Civ. 9297), filed in the United
States District Court, Southern District of New York is on behalf
of all persons who purchased American Depository Shares ("ADS") of
China Medical between November 26, 2007 and December 12, 2011,
inclusive (the "Class Period"). This class action is brought under
the Securities Exchange Act of 1934 and Rule 10b-5 against the
Company and certain of its top officials.
If you are a shareholder who purchased China Medical securities
during the Class Period, you have until February 17, 2012 to ask
the Court to appoint you as lead plaintiff for the class. A copy of
the complaint can be obtained at www.pomerantzlaw.com. To discuss
this action, contact Rachelle R. Boyle at rrboyle@pomlaw.com or
888.476.6529 (or 888.4-POMLAW), toll free, x350. Those who inquire
by e-mail are encouraged to include their mailing address and
telephone number.
The Complaint alleges that throughout the Class Period,
defendants made false and/or misleading statements and or failed to
disclose that: (1) the Company's acquisition of Beijing Bio-Ekon
Biotechnology Co. Ltd. ("BBE") was from a third party seller
connected to China Medical's Chairman, Wu Xiaodong; (2) the Company
overpaid approximately $20 million to acquire BBE; (3) the
Company's acquisition of BBE involved the use of fraudulent shell
companies; (4) BBE was suffering operating losses prior to the
acquisition; (5) the Company overstated accounts receivables in
order to inflate sales and net income; (6) the Company's reported
profit margins were inflated; and (7) as a result of the foregoing,
the Company's statements were materially false and misleading at
all relevant times.
On December 6, 2011, Glaucus Research Group published an analyst
report revealing, in part, that China Medical's Chief Executive
Officer was embezzling money through sham acquisitions, the
Company's reported profits and net income were inflated as they
were inconsistent with comparable competitors, and the majority of
the Company's account receivables were in excess of 120 days,
indicating that its reported revenues were inflated. On this news,
China Medical's shares declined $0.81 per share, or nearly 24%, to
close on December 6, 2011 at $2.57 per share.
On December 13, 2011, China Medical disclosed that the Company
intends to implement a debt restructuring plan to improve its
balance sheet. On this news, China Medical's shares declined $0.43
per share, or nearly 13%, to close on December 13, 2011 at $2.87
per share.
The Pomerantz Firm, with offices in New York, Chicago and
Washington, D.C., is acknowledged as one of the premier firms in
the areas of corporate, securities, and antitrust class litigation.
Founded by the late Abraham L. Pomerantz, known as the dean of the
class action bar, the Pomerantz Firm pioneered the field of
securities class actions. Today, more than 70 years later, the
Pomerantz Firm continues in the tradition he established, fighting
for the rights of the victims of securities fraud, breaches of
fiduciary duty, and corporate misconduct. The Firm has recovered
numerous multimillion-dollar damages awards on behalf of class
members. See www.pomerantzlaw.com.
CONTACT: Rachelle R. Boyle
Pomerantz Haudek Grossman & Gross LLP
rrboyle@pomlaw.com
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