Global Crossing - class action launched on behalf of shareholders

A Californian law firm claims to have launched a class action on behalf of shareholders in Asia Global Crossing Limited, alleging that someone (but their press release does not say who) "were aware before the IPO that there was a worldwide glut in available fiber (sic) optic capacity. Plaintiff alleges that defendants were aware of this glut and knew that Asia Global could never meet its targets. Instead, defendants went ahead with the IPO of Asia Global and issued a prospectus containing materially false and misleading statements about the Company's business and financial condition. Consequently, investors who purchased on the IPO purchased Asia Global's stock at artificially inflated prices."

The law firm alleges "a scheme and common course of conduct by defendants which operated as a fraud and deceit on the Class."

A deal was signed last week for the acquisition of part of the Global Crossing network by a group of investors including a subsidiary of Hutchinson Whompoa of Hong Kong.