Robbins LLP: Graña y Montero S.A.A. (GRAM) Misled Shareholders According to a Recently Filed Class Action
Robbins LLP announces that a class action complaint was filed against Graña y Montero S.A.A. (NYSE: GRAM) (“Graña”) in the U.S. District Court for the Eastern District of New York. The complaint is brought on behalf of all purchasers of Graña American Depositary Shares between July 24, 2013 and February 24, 2017, for alleged violations of the Securities Exchange Act of 1934 by Graña’s officers and directors. Graña, together with its subsidiaries, provides engineering and construction, infrastructure, real estate, and technical services in Latin America.
Graña Accused of Concealing Illegal Source of Revenue
According to the complaint, in a series of filings with the U.S. Securities and Exchange Commission, Graña officials attested to the accuracy of the company’s financial reporting, the disclosure of any material changes to its internal controls over financial reporting, and the disclosure of all fraud. In addition, Graña’s Registration Statement filed in connection with its initial public offering (“IPO”) on July 24, 2013, as well as the company’s Forms 20-F for the fiscal years 2013, 2014, and 2015, stated that the company abides by the highest corporate governance standards in Peru. The complaint alleges that the company failed to disclose that between 2005 and 2014, Graña generated millions of dollars in revenues from various construction and real estate contracts which had been procured through the payment of bribes to former Peruvian President Alejandro Toledo. Since Graña concealed the illegal source of its revenues, the company’s stock traded at artificially high prices, in turn allowing the company to generate $475 million in proceeds from its IPO.
On December 21, 2016, the U.S. Department of Justice announced that Graña’s Brazilian partner Odebrecht and Braskem S.A. agreed to pay $3.5 billion to resolve charges accusing the company of paying millions of dollars in bribes to government officials around the world. Graña subsequently announced that it was withdrawing from its partnership with Odebrecht, calling the partnership a “mistake.” On February 16, 2017, Reuters reported that an “ombudsman” had called for prosecutors to investigate Graña and Odebrecht in a corruption probe. Then, on February 24, 2017, a local news magazine revealed that Graña knew about the $20 million in bribes paid by Odebrecht to Toledo. On this news, Graña’s stock price fell $1.77 per share, approximately 35%, to close at $3.32 per share on February 24, 2017.
Graña Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Leonid Kandinov at (800) 350-6003, or you can complete the form below and we will contact you directly.