In another nasty turn for Xinhua Finance Media, the Class Action Newsline reports that New Orleans lawyers Kahn Gauthier Swick has initiated an investigation into Xinhua Finance Media Ltd. "to determine whether it has violated federal securities laws". The KGS press releases reports on former XFML CFO at the time of its IPO, Shelly Singhal and the resignation of Xinhua Proxy advisor Glass Lewis & Co.'s head of research, Lynn E. Turner on 18th May.
The rationale for the "investigation" is that "shares of Xinhua have fallen from a high of $12.75 per share on May 7, 2007 to an intraday low of $8.31 per share today in the wake of news". It concludes "If you are a Xinhua shareholder or purchased shares in its IPO or shortly thereafter, and have information that might assist in our investigation, or would like to discuss your legal rights, you may e-mail or call KGS".
I wonder if the Xinhua Finance team has any regrets about taking the XFML subsidiary to NASDAQ? It's listed in Tokyo. Those Japanese lawyers are much less aggressive.
Tuesday, May 22, 2007
The laywers size up XFML
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2 comments:
The lawyers are just joining in on a frenzy set in motion by a disgruntled former employee and journalists who print innuendo and half-truths. The short sellers have won this week, but the fact is XFML has a damn good business model.
I don't know the background to all this (as you appear to), but do agree that, so far, the Xinhua Finance story has been a mighty impressive one. This is not an easy business to navigate in China and Fredy Bush and her team seem to have done a great job. The point of my last sentence in today's post was that it will be a real pity if legal chaos surrounding the NASDAQ listing of a subsidiary should distract the management too much from their main business.
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