Focus Media Holding Ltd. Case 11/27/2007
DECEMBER 2011 - According to the Notice:
ALL PERSONS WHO PURCHASED OR ACQUIRED FOCUS MEDIA HOLDING LIMITED (“FOCUS MEDIA”) AMERICAN DEPOSITARY SHARES (“ADS”) OR AMERICAN DEPOSITARY RECEIPTS (“ADR”) DURING THE PERIOD SEPTEMBER 27, 2007 THROUGH NOVEMBER 19, 2007, INCLUSIVE, AND INCLUDING, WITHOUT LIMITATION, FOCUS MEDIA’S NOVEMBER 2007 SECONDARY PUBLIC OFFERING (THE “CLASS PERIOD”)
PLEASE READ THIS NOTICE CAREFULLY AND IN ITS ENTIRETY. YOUR RIGHTS MAY BE AFFECTED BY PROCEEDINGS IN THIS ACTION. PLEASE NOTE THAT IF YOU ARE A CLASS MEMBER, YOU MAY BE ENTITLED TO SHARE IN THE PROCEEDS OF THE SETTLEMENT DESCRIBED IN THIS NOTICE. TO CLAIM YOUR SHARE OF THIS FUND, YOU MUST SUBMIT A VALID PROOF OF CLAIM AND RELEASE POSTMARKED ON OR BEFORE APRIL 5, 2012.
This Notice has been sent to you pursuant to Rule 23 of the Federal Rules of Civil Procedure and an Order of the United States District Court for the Southern District of New York (the “Court”). The purpose of this Notice is to inform you of the proposed settlement of this class action litigation (the “Settlement”) and of the hearing to be held by the Court to consider the fairness, reasonableness, and adequacy of the Settlement. The Settlement resolves the Class’s claims against Focus Media, Jason Nanchun Jiang, Zhi Tan, Daniel Mingdong Wu, Donald J. Puglisi, David Feng Yu, Credit Suisse Securities (USA) LLC (“Credit Suisse”), Citigroup Global Markets Inc. (“Citigroup”), and Merrill Lynch & Co., Inc. (“Merrill Lynch”) (collectively, “Defendants”). This Notice describes the rights you may have in connection with the Settlement and what steps you may take in relation to the Settlement and this class action litigation.
The proposed Settlement creates a fund in the amount of Two Million United States Dollars (USD $2,000,000.00) in cash and will include interest that accrues on the fund prior to distribution. Based on Lead Counsel’s estimate of the number of shares entitled to participate in the Settlement and the anticipated number of claims to be submitted by Class Members, the average distribution per share to Class Members who purchased or acquired Focus Media ADS or ADR during the Class Period would be approximately $0.03 before deduction of Court-approved fees and expenses. Your actual recovery from this fund will depend on a number of variables, including the number of claimants, the number of Focus Media ADS or ADR they purchased or acquired, the number of Focus Media ADS or ADR you purchased or acquired, the expense of administering the claims process, and the timing of your purchases, acquisitions, and sales, if any (see the Plan of Distribution below for a more detailed description of how the settlement proceeds will be allocated among Class Members).
On November 27, 2007, a corporate disclosure statement stating that there is no corporate parent was filed. Just as quickly, a motion to appoint Iron Workers Local No. 25 Pension Fund to serve as lead plaintiff was filed on January 28, 2008. On February 05, 2008, an Order on the instructions and deadlines was entered in regards to any opposition of the above mentioned motion. Hence, a stipulation and Order on the extension of time to respond to complaint was entered on February 27, 2008. Lastly, an Order granting the appointment of Iron Workers as lead plaintiff, the selection of lead counsel as well as consolidating cases was entered on April 25, 2008.
According to a law firm press release dated November 26, 2007, a class action has been commenced on behalf of purchasers of the American Depositary Shares of Focus Media Holding Limited in the Company’s secondary public offering on or about November 7, 2007.
The complaint charges Focus Media and certain of its officers and directors with violations of the Exchange Act of 1933. Focus Media operates out-of-home advertising network using audiovisual television displays in the People’s Republic of China.
According to the complaint, on or about November 1, 2007, Focus Media filed a Form F-1/A Registration Statement with the Securities and Exchange Commission for the Secondary Offering. On or about November 6, 2007, the Prospectus with respect to the Secondary Offering, which forms part of the Registration Statement, became effective and more than 13.5 million shares of Focus Media’s ADSs at $64.75 per ADS were sold to the public, thereby raising more than $888 million.
The complaint alleges that the Registration Statement and the Prospectus contained inaccurate statements of material fact because they failed to disclose that the Company had made numerous acquisitions in its Internet advertising business division which were depressing its gross margins in that important division. On November 19, 2007, after the close of the market, Focus Media issued a press release announcing its financial results for the third quarter of 2007, the period ending September 30, 2007. Among other things, the Company reported that its gross margins for the third quarter of 2007 had declined due to several recent acquisitions. Following the Company’s earnings release, on November 20, 2007, the price of Focus Media ADSs dropped from $57.15 per ADS to $52.00 per ADS on extremely heavy trading volume.