Shareholder Class Action Filed Against Vimpel-Communications By The Law Firm of Schiffrin & Barroway, LLP
BALA CYNWYD, Pa., Dec. 10 2004 – LAWFUEL – First with law news – The following statement was issued today by the law firm of Schiffrin & Barroway, LLP:
Notice is hereby given that a class action lawsuit was filed in the United
States District Court for the Southern District of New York on behalf of all
securities purchasers of Open Joint Stock Company “Vimpel-Communications”
(a/k/a Vympel Communicatii) (NYSE: VIP) (RTS: VIMP) (“VimpelCom” or the
“Company”) from March 25, 2004 through December 8, 2004, inclusive (the “Class
Period”).
If you wish to discuss this action or have any questions concerning this
notice or your rights or interests with respect to these matters, please
contact Schiffrin & Barroway, LLP (Marc A. Topaz, Esq. or Darren J. Check,
Esq.) toll-free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at
info@sbclasslaw.com.
VimpelCom is a leading provider of telecommunications services in Russia
and Kazakhstan. The Company operates under the ‘Bee Line GSM’ brand in Russia
and ‘K-mobile’ and ‘EXCESS’ brands in Kazakhstan. VimpelCom is recognized for
introducing two digital cellular communications standards in Russia. It built
the first dual-band GSM-900/1800 cellular network in Russia and leads the
development and emergence of the mass consumer market for wireless
telecommunications in Russia with prepaid products.
The complaint charges VimpelCom, Alexander V. Izosimov and Elena A.
Shmatova with violations of the Securities Exchange Act of 1934. More
specifically, the Complaint alleges that the Company failed to disclose and
misrepresented the following material adverse facts which were known to
defendants or recklessly disregarded by them: (1) that VimpelCom was passing
fifty percent (50%) of its revenues from its Moscow operations to its wholly
owned subsidiary KB Impuls, thereby improperly deducting fifty percent (50%)
of Moscow revenues as expenses to VimpelCom; (2) as such, VimpelCom was only
paying taxes on fifty percent (50%) of the Moscow revenues rather than on all
revenues from its Moscow operations, including revenues passed onto KB Impuls;
(3) that this improper deduction caused VimpelCom to artificially inflate its
financial results by at least US$534 million for fiscal years 2001-2003; (4)
that as a result of this, the Company’s financial results were in violation of
generally accepted accounting principles (“GAAP”); (5) that the Company lacked
adequate internal controls; and (6) that as a result of the above, the
Company’s financial results were materially inflated at all relevant times.
On December 8, 2004, VimpelCom announced that it had received an act with
preliminary conclusions of the review of VimpelCom’s 2001 tax filing by its
tax inspectorate, stating that the Company owed an additional 2.5 billion
rubles which is approximately US$90 million in tax (plus 1.9 billion rubles or
approximately US$67 million in fines and penalties). A large portion of this
amount related to the deductibility of expenses incurred by VimpelCom in
connection with the agency relationship between VimpelCom and its wholly owned
subsidiary, KB Impuls, which held the GSM license for the city of Moscow and
the Moscow region. News of this shocked the market. Shares of VimpelCom fell
$8.38 per share, or 21.78 percent, to close at $30.10 per share on unusually
high trading volume.
Plaintiff seeks to recover damages on behalf of class members and is
represented by the law firm of Schiffrin & Barroway, which prosecutes class
actions in both state and federal courts throughout the country. Schiffrin &
Barroway is a driving force behind corporate governance reform, and has
recovered in excess of a billion dollars on behalf of institutional and high
net worth individual investors. For more information about Schiffrin &
Barroway, or to sign up to participate in this action online, please visit
http://www.sbclasslaw.com .
If you are a member of the class described above, you may, not later than
February 8, 2005, 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 Schiffrin & Barroway, or other
counsel of your choice, to serve as your counsel in this action.
CONTACT: Schiffrin & Barroway, LLP
Marc A. Topaz, Esq.
Darren J. Check, Esq.
Three Bala Plaza East, Suite 400
Bala Cynwyd, PA 19004
1-888-299-7706 (toll-free) or 1-610-667-7706
Or by e-mail at info@sbclasslaw.com
