NEW YORK, May 27, 2005 (PRIMEZONE) -- Murray, Frank & Sailer LLP has filed a class action lawsuit on behalf of shareholders who purchased or otherwise acquired the securities of Rhodia S.A. ("Rhodia" or the "Company") (NYSE:RHA) (Paris:RHA) (Munich:RHD) between April 26, 2001 and March 23, 2004, inclusive (the "Class Period").
The complaint alleges that throughout the Class Period, defendants issued materially false and misleading financial statements to the investing public. During the Class Period, the Company made numerous positive statements concerning its operating units' performance and its financial condition. However, defendants failed to disclose or materially misrepresented the following adverse facts in an effort to overstate the Company's financial results: (1) defendants failed to provide appropriate measures that would permit an investor to interpret the trends of ChiRex's operations and business performance; (2) ChiRex was being carried on the Company's books at an inappropriately high value given the turnover of ChiRex's business; (3) the Company failed to timely write down the value of its ChiRex subsidiary; (4) the Company failed to depreciate its deferred taxes assets in fiscal year 2002 and in the 1st half of 2003; and (5) Rhodia failed to adequately disclose the components comprising its debt and potential liabilities that acted to misrepresent the Company's liquidity, including off balance sheets items and the coverage of its environmental risks. By failing to disclose, or misrepresent, material information, defendants caused the price of the securities of Rhodia to be inflated which acted to enhance each of their executive positions and substantial compensation and permitted the Company to raise EUR1 billion in Notes in a private placement on May 28, 2003, as well as EUR290 million in a private placement of Notes with American investors in 2001 at terms favorable to the Company that it would have not otherwise received had the truth been known.
On March 23, 2004, Rhodia revealed in filings with the Securities and Exchange Commission ("SEC") that its auditor had expressed concerns about Rhodia's cash position and that French regulators had commenced an investigation into the financial statements and reports previously issued by the Company. On March 25, 2005, French regulators issued a report that found that the Company had failed to disclose the material information discussed above in a timely fashion beginning in 2001.
Murray, Frank & Sailer LLP and its predecessor firms have devoted its practice to shareholder class actions and complex commercial litigation for more than thirty years and have recovered hundreds of millions of dollars for shareholders in class actions throughout the United States.
If you purchased or otherwise acquired Rhodia securities on any world exchange between April 26, 2001 and March 23, 2004, and sustained damages, you may, no later than June 6, 2005, move the Court to serve as lead plaintiff. Shareholders outside the United States may also join the action, regardless of which exchange was used to purchase the securities. To serve as lead plaintiff, however, you must meet certain legal requirements. You can join this class action as lead plaintiff online at http://www.murrayfrank.com/CM/NewCases/NewCases.asp. If you would like to discuss this action, this announcement, or your rights and interests, please contact plaintiff's counsel Eric J. Belfi or Christopher Hinton of Murray, Frank & Sailer LLP.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.