A proposed securities class action lawsuit was recently brought forth against GreenStar Agricultural Corporation, its former auditor, as well as current and former directors and officers.
GreenStar Agricultural Corporation basics
The company, previously known as China Green Star Agricultural Corporation, processes agricultural products like vegetables and canned fruits so they can be distributed both internationally and domestically. In addition, the firm also grows and harvests various produce to sell.
Siskinds LLP announced on Oct. 21, 2014, that it had brought forth the lawsuit against the aforementioned defendants, making allegations that involved the resignation of the company's key Canadian officials, and also the firm's inability to complete a 2013 audit. The law firm filed the legal claim in an effort to recover losses incurred by all investors – excluding certain individuals – who owned company securities on June 4, 2014.
Canadian officials resign their posts
GreenStar Agricultural Corporation announced on Sept. 25, 2014, that the Canadian directors of the firm, including executive chairman Michael Newman, had resigned. Michael Lam, chief financial officer, Rose Xie, controller, Judith Hong Wilkin, secretary and Robert Macdonald, manager of Corporate Development, also left their posts. In addition, the company's legal counsel revealed it plans to stop providing legal services.
Three members of the audit committee – Frank Galati, Bryan Knebel and Bob Guo – and company auditor Swartz, Levitsky, Feldman all resigned. The firm's auditor stated at the time that since they were unable to gather the needed information from the Audit Committee's independent investigation, they lacked forward visibility in terms of potentially completing the 2013 audits.
The company stated in its press release that CEO and chairman Guan Lianyun's failure to cooperate, fund and support the completion of the 2013 audit was the reason why the aforementioned officers, directors and service providers stopped working for the firm.
Class action lawsuit allegations
Regarding the circumstances surrounding the aforementioned resignations and the firm's inability to complete its 2013 audit, the lawsuit claimed, among other things, that documents issued by the company – including its 2014 private placement subscription agreement, as well as certain audited and unaudited financial statements – contained material representations that were false.
According to the suit, defendants are liable for damages suffered by the proposed class of shareholders. Shareholders interested in finding out more about this securities class action lawsuit can contact Siskinds LLP's Nicole Young through telephone or email.