NEW YORK, May 16, 2006 (PRIMEZONE) -- Notice is hereby given that a class action lawsuit was filed by the law firm of Wechsler Harwood LLP ("Wechsler Harwood") in the United States District Court for the Southern District of New York. Plaintiff brings this action on behalf of herself and a class of non-management stockholders who purchased stock in China Energy Savings Technology, Inc. ("China Energy" or the "Company") (Nasdaq: CESV) during the period from April 21, 2005 through February 15, 2006, inclusive(the "Class Period")(the "Class"). The complaint alleges that defendants made false and misleading statements and material omissions regarding the Company's financial performance, including with regard to the Company's recent $50 million private placement. As a result, the price of the Company's securities was inflated during the Class Period.
The complaint alleges, that on January 17, 2006, the Company announced an underwriting agreement to raise $50 million through a private placement of Company stock. The very same day, China Energy announced that defendant Sun Li resigned as Chairman and CEO of the Company and immediately appointed defendant Kwun Luen Siu to replace him. The Company did not disclose that, in fact, the $50 million private placement was a case of massive self-dealing -- over 6 million of the shares to be sold were indirectly owned by defendant Li.
Moreover, defendants did not disclose that defendant Li had recommended defendant Siu as his replacement and that, prior to being vetted by defendant Li for the role of China Energy CEO, defendant Siu had played an active role in facilitating defendants' self-dealing. According to the complaint, prior to the announcement of the Company's $50 million private placement, defendant Siu introduced the investment group that would underwrite the Company's $50 million private placement offering to defendant Li and the Company.
The lawsuit also charges that during the Class Period insiders sold their Company stock at artificially inflated prices, thereby reaping more than $114 million in proceeds.
Plaintiff seeks to recover damages on behalf of the Class and is represented by Wechsler Harwood, which has extensive experience representing shareholders in class actions and has been recognized as able practitioners by the courts. www.whesq.com
If you are a member of the Class described above, you may, not later than June 30, 2006, move the Court to serve as lead plaintiff of the Class, if you so choose. A lead plaintiff is a representative party that acts on behalf of other Class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the Class member's claim is typical of the claims of other Class members, and that the Class member will adequately represent the Class. Under certain circumstances, one or more Class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Wechsler Harwood, or other counsel of your choice, to serve as your counsel in this action.
Wechsler Harwood has taken a leading role in many important actions on behalf of defrauded shareholders, employee investors, and consumers and is responsible for hundreds of millions of dollars in recoveries. You can obtain a copy of the complaint by visiting the Wechsler Harwood website at http://www.whesq.com or by contacting the firm directly. The Wechsler Harwood website contains detailed information regarding this matter and additional information about the firm. If you wish to discuss this action with us, or have any questions concerning this notice or your rights and interests with regard to the case, please contact our Shareholder Relations Department: