Bernstein Liebhard LLP today announced that a class action has been commenced in the United States District Court for the Southern District of New York on behalf of purchasers of Veolia Environnement S.A. (“Veolia” or the “Company”) (NYSE: VE) American Depository Shares (“ADSs”) during the period between April 27, 2007 and August 4, 2011, inclusive (the “Class Period”).
The complaint charges Veolia and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Veolia operates utility and public transportation businesses. The Company supplies drinking water, provides waste management services, manages and maintains heating and air conditioning systems, and operates rail and road passenger transportation systems.
The complaint alleges that, during the Class Period, defendants issued materially false and misleading statements regarding the Company’s business and prospects. Specifically, defendants misrepresented and/or failed to disclose the following adverse facts: (a) that Veolia was materially overstating its financial results by engaging in improper accounting practices; (b) that the Company lacked adequate internal controls and was therefore unable to ascertain its true financial condition; (c) that Veolia failed to timely record an impairment charge for its Transport business in Morocco, Environmental Services businesses in Egypt, Marine Services business in the United States, and for Southern Europe; (d) that the Company’s revenues were being hampered by the renewal of some of its major concession contracts; and (e) that, as a result of the foregoing, defendants lacked a reasonable basis for their positive statements about the Company and its prospects.
On August 4, 2011, Veolia announced its half year results, for the period ended June 30, 2011. For the half year, the Company reported consolidated revenue of €16,286.7 million. Moreover, defendants reported operating income of €252.2 million, compared to €1100.7 million in the prior year period, due to “non-recurring write-downs amounting to €686M (principally in Italy, Morocco and the United States).” The Company stated that it would exit certain businesses and certain geographies, including its Transport business in Morocco, Environmental Services businesses in Egypt, Marine Services business in the United States and in Southern Europe. In reaction to these announcements, the price of Veolia ADSs fell $4.66 per share, or over 22%, to close at $16.10 per share, on heavy trading volume.