Settled: January 01, 2015
Labaton Sucharow served as liaison counsel in this action brought in the Netherlands by European shareholder group Deminor against Royal Imtech N.V. (Imtech), a provider of technical services inside and outside Europe.
The action involved a series of disclosures published on February 4, 2013. First, Imtech announced that serious problems with its projects in Poland had required a “substantial write-off of at least €100 million.” Second, Imtech revealed that it would reclassify €200 million that had earlier been reported as cash and cash equivalents. Third, the company advised that it would not distribute a dividend for the year 2012. Finally, Imtech disclosed that it would be postponing publication of its financial statements for 2012 as well as the annual general meeting, that it had suspended its local Polish management, and that its Board of Management had ordered an investigation into these matters.
These disclosures were particularly surprising to investors because, as recently as July 2012, Imtech had offered positive assessments of its expansion into Eastern Europe.
In reaction to these disclosures, on February 4, 2013, Imtech’s share price fell almost 50 percent, closing €10.20 per share. On February 5, 2013, Imtech reported the resignations of the CEO and CFO of Imtech Deutschland, who had direct management responsibilities for the Polish projects. Imtech’s share price, which had recovered a small part of its losses, dropped again on February 6, 2013 to close at €9.91 per share, below the closing price on February 4, 2013.
Following an internal investigation, Royal Imtech acknowledged the existence of “fraudulent actions” and the disclosure of “inflated financial information,” as well as various forms of accounting irregularities.
Deminor filed suit against Imtech in 2013, which settled in 2015 for confidential terms.