Robbins Umeda LLP has commenced an investigation into possible breaches of fiduciary duty and other violations of the law by certain officers and directors at Telestone Technologies Corporation (“Telestone” or the “Company”) (NASDAQ: TSTC). Telestone provides access to network solutions primarily to the People’s Republic of China. Its access network solutions include the research, development, and application of access network technology. The company was founded in 1987 and is headquartered in Beijing, the People’s Republic of China.
Robbins Umeda LLP’s investigation concerns whether Telestone’s directors and officers caused the Company to issue materially false and misleading statements regarding the Company’s operations and its business and financial results. Specifically, the investigation concerns whether these fiduciaries misled investors about Telestone’s increase in growth revenue and net income from the first quarter of 2005 to the most recent quarter. Of particular concern is the accounts receivable issues relating to long-term receivables. Telestone stated in an investor presentation in February 2010 that they receive 10% of their cash from a typical project after twenty-four months. However, Telestone only reported a long term receivable once in its quarterly financials for the past twenty-three quarters.
Robbins Umeda LLP is also investigating whether the Company’s directors and officers instituted and maintained adequate internal financial controls. In particular, in the Company’s annual financial statement filed with the U.S. Securities and Exchange Commission on March 31, 2010, it stated that a review of internal controls found five control deficiencies that constitute material weaknesses, as defined by the U.S. Public Company Accounting Oversight Board. According to the Company’s annual statement, these control deficiencies “could result in more than a remote likelihood that a material misstatement in our annual or interim financial statements would not be prevented or detected on a timely basis by our internal controls.”
If you purchases shares of Telestone, and would like more information about your rights as a shareholder, please contact attorney Gregory E. Del Gaizo at 800-350-6003 or by e-mail at email@example.com.