Shareholder Class Action Filed Against Harmony Gold Mining Company Limited by the Law Firm of Schiffrin Barroway Topaz & Kessler
17 April 2008 - 9:00AM
PR Newswire (US)
RADNOR, Pa., April 16 /PRNewswire/ -- The following statement was
issued today by the law firm of Schiffrin Barroway Topaz &
Kessler, 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 purchasers of American
Depository Receipts ("ADRs" or "shares") and call options and
sellers of put options of Harmony Gold Mining Company Limited
(NYSE/Nasdaq: HMY) ("Harmony Gold" or the "Company") between April
2, 2007 and August 7, 2007, 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 Topaz & Kessler, LLP (Darren
J. Check, Esq. or Richard A. Maniskas, Esq.) toll free at
1-888-299-7706 or 1-610-667-7706, or via e-mail at . The Complaint
charges Harmony Gold and certain of its officers and directors with
violations of the Securities Exchange Act of 1934. Harmony Gold is
a gold producer that operates 22 individual mines and projects
across the world. 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 the Company's costs had significantly
increased throughout 2007; (2) that the Company had underreported
these increased costs in its previously issued financial
statements; (3) that the Company had experienced a significant
decrease in gold production for the third quarter 2007 due to
production problems at various sites, which had already
materialized at the time its Class Period statements were made; (4)
that the Company had failed to disclose the full impact that these
production problems would have on the Company's financial and
operational results; (5) that, as a result of the Company's
understatement of its costs and its lower production for the
quarter, the Company had understated its operating costs and
overstated its net profit for the third quarter; (6) that, as a
result of the foregoing, the Company's financial statements were
materially false and misleading at all relevant times; (7) that the
Company would be forced to take substantial charges in the fourth
quarter 2007 to remedy such failures, causing the Company to report
a net loss for the quarter; (8) that the Company lacked adequate
internal and financial controls; and (9) that, as a result of the
above, the Company's statements about its financial well-being and
future business prospects were lacking in any reasonable basis when
made. On August 6, 2007, Harmony Gold reported preliminary
financial and operational results for its fourth quarter and fiscal
year 2007 (ended June 30, 2007). The Company warned that its
financial results for the quarter were "expected to differ
significantly from those of the three previous quarters as well as
from the analysts' consensus." For the fourth quarter, the Company
stated that it expected to report a headline loss of between 130
and 160 SA cents per share, compared with a headline profit of 58
SA cents per share for the third quarter. This quarterly loss was
primarily the result of the Company recording significantly higher
costs for the quarter, and included a 25 to 28 percent increase in
the Company's total cash operating costs as a result of "the newly
installed accounting software system that resulted in some of the
March quarter's costs being captured in the June 2007 quarter."
Thus, the Company had substantially understated its costs in
previous quarters and was forced to take substantial charges in the
fourth quarter to remedy such underreported costs. Additionally,
the Company reported that its cost base had increased by 8 to 12
percent from the previous six months. Finally, the Company
announced that its Chief Executive Officer had resigned, "with
immediate effect." On this news, the Company's shares fell $2.45
per share, or over 18 percent, to close on August 6, 2007 at $11.02
per share, on unusually heavy trading volume. The following day,
the Company's shares declined an additional $1.57 per share, or
over 14 percent, to close on August 7, 2007 at $9.45 per share,
again on heavy trading volume. This closing price on August 7, 2007
represented a two-day decline in the Company's shares of $4.02 per
share, or 29.8 percent, and a cumulative decline of $7.25 per
share, or over 43.4 percent, from the value of the Company's shares
at their Class Period high of $16.70 on April 25, 2007. Plaintiff
seeks to recover damages on behalf of class members and is
represented by the law firm of Schiffrin Barroway Topaz &
Kessler which prosecutes class actions in both state and federal
courts throughout the country. Schiffrin Barroway Topaz &
Kessler is a driving force behind corporate governance reform, and
has recovered billions of dollars on behalf of institutional and
individual investors from the United States and around the world.
For more information about Schiffrin Barroway Topaz & Kessler
or to sign up to participate in this action online, please visit
http://www.sbtklaw.com/ If you are a member of the class described
above, you may, not later than June 16, 2008, 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. Your ability to
share in any recovery is not, however, affected by the decision
whether or not to serve as a lead plaintiff. Any member of the
purported class may move the court to serve as lead plaintiff
through counsel of their choice, or may choose to do nothing and
remain an absent class member. CONTACT: Schiffrin Barroway Topaz
& Kessler, LLP Darren J. Check, Esq. Richard A. Maniskas, Esq.
280 King of Prussia Road Radnor, PA 19087 1-888-299-7706 (toll
free) or 1-610-667-7706 Or by e-mail at DATASOURCE: Schiffrin
Barroway Topaz & Kessler, LLP CONTACT: Darren J. Check, Esq.,
or Richard A. Maniskas, Esq., both of Schiffrin Barroway Topaz
& Kessler, LLP, +1-888-299-7706, +1-610-667-7706, Web site:
http://www.sbtklaw.com/
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