Agria Corporation (ADS) (NYSE: GRO) Investor Securities Class Action Lawsuit 04/11/2008

If you purchased American Depositary Shares (ADS) of Agria Corporation (NYSE: GRO), you might have certain options and should contact the Shareholders Foundation, Inc.

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Company Name(s): 
Agria Corporation
Case Name: 
Agria Corporation Shareholder Class Action Lawsuit 04/11/2008
Case Status: 
Lawsuit Filed
Case Status: 
Settlement Approved
Affected Securities
NYSE: GRO
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
04/11/2008
Class Period Begin: 
11/06/2007
Class Period End: 
06/26/2008
Court of Filing: 
U. S. District Court for the Southern District of New York
Deadline To File for Lead: 
07/04/2008
Date Settled: 
06/07/2011
Settlement Amount: 
$3,750,000
Deadline to Participate in Settlement: 
01/14/2011
Summary: 

January 3, 2012 - The court ordered the authorization of the distribution of the net settlement fund.

June 7, 2011 - The court approved the settlement, entered the orders approving the plan of allocation, the motion for attorneys’ fees and expenses, and dismissed the action with prejudice.

September 20, 2010 - The court preliminarily approved the settlement.

August 9, 2010 - Parties filed a stipulation of settlement.

February 11, 2010 - The defendants filed a motion to dismiss.

December 28, 2009 - The lead plaintiff filed a second amended consolidated complaint.

December 14, 2009 -The lead plaintiff filed a motion for reconsideration.

November 30, 2009 - The court granted the defendants’ motion to dismiss.

March 20, 2009 -The defendants filed a motion to dismiss.

February 3, 2009 -The lead plaintiff filed an amended consolidated complaint on behalf of investors who purchased UBS AG American Depositary Shares (ADSs) (NYSE: GRO) between November 6, 2007 to June 26, 2008. The lead plaintiff alleges that the defendants violated the Securities Act of 1933 by issuing false and misleading statements between November 6, 2007 to June 26, 2008.

December 3, 2008 - The lead plaintiff and lead counsel were appointed and all cases were consolidated.

June 10, 2008 - Lead plaintiff motions were filed.

May 13, 2008 - Another investor filed a complaint.

April 24, 2008 - Another investor filed a complaint.

April 11, 2008 - An investor in American Depositary Shares (ADS) of Agria Corporation (NYSE: GRO) filed a lawsuit in the U.S. District Court for the Southern District of New York against Agria Corporation over alleged violations of Federal Securities Laws in connection with certain allegedly false and misleading statements made between November 6, 2007 and April 8, 2008.

The plaintiff alleges that between November 6, 2007 and April 8, 2008 Agria Corporation and certain of its officers and directors violated the Securities Act of 1933 by failing to disclose and misrepresent the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that Agria Corporation had failed to secure enforceable employment agreements with its Chief Operating Officer ("COO") and other key executives prior to its IPO; (2) that Agria Corporation 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 Agria Corporation's future success); (3) that these dramatically increased compensation expenses would materially impact Agria Corporation'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 Agria Corporation'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 Agria Corporation 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 Agria Corporation; (6) that various accounting and payment issues, which existed at the time of the IPO, would subsequently prohibit Agria Corporation's auditors from completing its audit of Agria Corporation's financial statements; (7) that Agria Corporation lacked adequate internal and financial controls; and (8) that, as a result of the foregoing, Agria Corporation's Registration Statement was false and misleading at all relevant times.

On November 6, 2007 Agria Corporation conducted its IPO. In connection with its IPO, Agria Corporation filed a Registration Statement with the SEC. The IPO was a financial success for Agria Corporation and its selling shareholder, Brothers Capital Limited, as they raised over $282 million by selling 17,150,000 of Agria Corporation's securities to investors at a price of $16.50 per share.

On April 7, 2008 after the close of the market, Agria Corporation shocked investors when it announced that its auditors were unable to begin their audit of Agria Corporation's financial statements for 2007 due to various accounting and payment issues. Agria Corporation warned that "given the substantial delay in the commencement of the audit process, there is a risk that Agria Corporation 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. Agria Corporation also announced that its COO had resigned. Further, Agria Corporation 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 Agria Corporation shares (which represented 22% of Agria Corporation) so as to "provide incentive for their continuing service and align their interests with those of the shareholders." As Agria Corporation 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 Agria Corporation in the period in which the payment is made."

Upon the release of this news, shares of Agria Corporation's securities (NYSE: GRO) 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 Agria Corporation's shares at the time of its IPO just months prior.

Agria Corporation engages in the research and development, production, and sale of upstream agricultural products in the People's Republic of China.