NEW YORK, Dec. 13, 2004 (PRIMEZONE) -- Murray, Frank & Sailer LLP has filed "Yates v. Vympel Communicatii," Civil Action No. 04-CV-9742, a class action lawsuit on behalf of purchasers of the securities of Vympel Communications ("Vympel" or the "Company") (NYSE:VIP) between March 25, 2004 and December 8, 2004, inclusive (the "Class Period").
The complaint charges Vympel, Alexander V. Izosimov and Elena A. Shmatova with violations of the Securities Exchange Act of 1934. 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 Vympel was passing fifty percent (50%) of its revenues from its Moscow operations to its wholly owned subsidiary KB Impuls, thereby improperly deducting fifty percent (50%) of Moscow revenues as expenses to Vympel; (2) as such, Vympel was only paying taxes on fifty percent (50%) of the Moscow revenues rather than on all revenues from its Moscow operations, including revenues passed onto KB Impuls; (3) that this improper deduction caused Vympel to artificially inflate its financial results by at least US$534 million for fiscal years 2001-2003; (4) that as a result of this, the Company's financial results were in violation of generally accepted accounting principles ("GAAP"); (5) that the Company lacked adequate internal controls; and (6) that as a result of the above, the Company's financial results were materially inflated at all relevant times.
On December 8, 2004, Vympel announced that it had received an act with preliminary conclusions of the review of Vympel's 2001 tax filing by its tax inspectorate, stating that the Company owed an additional 2.5 billion rubles which is approximately US$90 million in tax (plus 1.9 billion rubles or approximately US$67 million in fines and penalties). A large portion of this amount related to the deductibility of expenses incurred by Vympel in connection with the agency relationship between Vympel and its wholly owned subsidiary, KB Impuls, which held the GSM license for the city of Moscow and the Moscow region. News of this shocked the market. Shares of Vympel fell $8.38 per share, or 21.78 percent, to close at $30.10 per share on unusually high trading volume.
Murray, Frank & Sailer LLP and its predecessor firms have devoted its practice to shareholder class actions and complex commercial litigation for more than thirty years and have recovered hundreds of millions of dollars for shareholders in class actions throughout the United States.
If you purchased or otherwise acquired Vympel securities on any world exchange between March 25, 2004 and December 8, 2004, and sustained damages, you may, no later than February 8, 2005, move the Court to serve as lead plaintiff. Shareholders outside the United States may also join the action, regardless of which exchange was used to purchase the securities. To serve as lead plaintiff, however, you must meet certain legal requirements. You can join this class action as lead plaintiff online at http://www.murrayfrank.com/CM/NewCases/NewCases.asp. If you would like to discuss this action, this announcement, or your rights and interests, please contact plaintiff's counsel Eric J. Belfi or Aaron D. Patton of Murray, Frank & Sailer LLP.