Orient Paper Inc Investors File Lawsuit
June 21, 2012 (Update) -- Proposed $2 million settlement in the lawsuit pending against Orient Paper, Inc. and certain current and former officers and directors.
August 6, 2010 -- An investor in ONP stock filed a lawsuit in U.S. District Court for the Central District of California on behalf of investors who purchased common stock of Orient Paper, Inc. (AMEX: ONP) during the period between March 27, 2009 and July 22, 2010, against Orient Paper and others over alleged violations of Federal Securities Laws.
Orient Paper, Inc. is the holding company for Hebei Baoding Orient Paper Milling Company Limited (HBOP), a producer and distributor of paper products in China.
According to the complaint the plaintiff alleges that Orient Paper and certain of its officers and directors misrepresented Orient Paper’s financial performance, business prospects, and financial condition. The Complaint also names Roth Capital Partners LLP as a defendant because it underwrote a public offering for Orient Paper on March 31, 2010. The Complaint asserts that Orient Paper’s revenues were substantially overstated and that it exaggerated the extent of its business operations. Orient Paper Inc was able to triple its Total Revenue within the past three years. Orient Paper Inc reported in 2007 Total Revenue of $39.71million, in 2008 $65.20million, and in 2009 $102.14million. Over the same time period its Net Income increased from $4.06million in 2007, to $8.77million in 2008, and $12.72million in 2009. On June 28, 2010, an entity calling itself Muddy Waters released a report containing facts indicating that Orient Paper has issued false financial statements and press releases. The report was followed by a series of back-and-forth accusations between Muddy Waters and Orient Paper. Then on July 16, 2010, Orient Paper announced that it decided to retain a law firm and a “Big Four” audit firm to conduct an investigation into the issues raised by Muddy Waters LLC. As a result of these disclosures, so the lawsuit, Orient Paper’s share price dropped substantially, damaging shareholders. Shares of Orient Paper Inc (NYSE:ONP) recently traded at $5.25 per share, down from its 52weekHigh of $15.15 per share.