Glancy Binkow & Goldberg LLP, representing investors of Ambow Education Holding Ltd. (“Ambow” or the “Company”) (NYSE:AMBO), announces that a class action lawsuit has been commenced on behalf of all purchasers of the American Depositary Shares (“ADSs”) of Ambow between May 18, 2011 and May 16, 2012, inclusive (the “Class Period”), alleging violations of the Securities Exchange Act of 1934 (the “Complaint”). The Complaint filed by Glancy Binkow & Goldberg, Gudimetla v. Ambow Education Holding Ltd., et al., Case No. 2:12-cv-05062-PSG, is pending in the United States District Court for the Central District of California before United States District Judge Philip S. Gutierrez.
The Complaint charges Ambow and certain of the Company’s executive officers with violations of federal securities laws. Ambow provides educational and career enhancement services in the People’s Republic of China. The Complaint alleges that throughout the Class Period the defendants issued false and misleading statements or failed to disclose material adverse facts about Ambow’s business, operations and prospects. Specifically, the Complaint alleges that the defendants misrepresented or failed to disclose that: (1) certain of the Company’s distributors did not have an adequate history of timely payment; (2) as such, the collection of resulting receivables from these distributors was not reasonably assured; (3) as a result, the Company was improperly recognizing revenue on sales to these distributors; (4) that the Company was improperly accounting for certain business acquisitions; (5) as a result of the foregoing, the Company’s financial results were misstated during the Class Period; (6) the Company lacked adequate internal and financial controls; and (7), as a result of the above, the Company’s financial results were materially false and misleading at all relevant times.
On May 16, 2012, Ambow disclosed that the Company had identified certain preliminary adjustments to its previously issued 2011 unaudited financial statements and expected, among other things: (i) to change its revenue recognition method with respect to sales to certain distributors, leading to a $13.5 -$15.1 million (RMB85-95 million) reversal of revenue previously recognized in 2011; (ii) to make a bad debt provision of $2.1-$2.4 million (RMB13-15 million); and (iii), to increase its depreciation and other expenses by $0.5-$1.6 million (RMB3-3.5 million).
As a result of this news, the Company's shares declined $0.99 per share, or 17.55%, to close on May 16, 2012, at $4.65 per share, on unusually heavy volume, and further declined $0.30 per share, or 6.45%, to close on May 17, 2012, at $4.35 per share, also on unusually heavy volume.
Any person or group who suffered a loss as a result of purchasing Ambow ADSs between May 18, 2011 and May 16, 2012 may ask the Court to be appointed as Lead Plaintiff but must file a motion no later than the August 10, 2012 deadline, and must meet certain legal requirements. Your ability to share in any recovery doesn’t require that you serve as a Lead Plaintiff. To be a member of the Class you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent class member.
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 Michael Goldberg, Esquire, of Glancy Binkow & Goldberg LLP, 1925 Century Park East, Suite 2100, Los Angeles, California 90067, by telephone at (310) 201-9150, Toll Free at (888) 773-9224, by e-mail to firstname.lastname@example.org, or visit our website at http://www.glancylaw.com.
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