China Energy Savings Technology (CESV)

[Golden Cross]

Scott+Scott, LLC Files Class Action Lawsuit Against China Energy Savings Technology Inc. on Behalf of Investors -- CESV
Monday May 15, 6:52 pm ET


COLCHESTER, Conn., May 15, 2006 (PRIMEZONE) -- On May 15, 2006, Scott+Scott, LLC, filed a class action against China Energy Savings Technology Inc. (``China Energy'' or the ``Company'') (NasdaqNM:CESV - News) and certain officers in the U.S. District Court for the Southern District of New York. The action is on behalf of China Energy securities purchasers during the period April 21, 2005 through February 15, 2006, inclusive (the ``Class Period''), for securities law violations. The complaint alleges that defendants made false and misleading statements and material omissions regarding the Company's financial performance, including that the Company's recent $50 million private placement was fraught with self-dealing. As a result, the price of the Company's securities was inflated during the Class Period, thereby harming investors.
If you purchased China Energy securities during the Class Period and wish to serve as a lead plaintiff in the action, you must move the Court no later than June 30, 2006. Any purported class member may move the Court to serve as lead plaintiff through counsel of its choice, or may choose to do nothing and remain an absent class member. If you wish to discuss this action or have questions concerning this notice or your rights, please contact Scott+Scott ([e-mail], [phone], [phone]) or visit the Scott+Scott website, http://www.scott-scott.com, for more information. There is no cost or fee to you.

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On January 17, 2006, the Company announced an underwriting agreement to raise $50 million through a private placement of Company stock. The very same day, China Energy announced that defendant Sun Li resigned as Chairman and CEO of the Company and immediately appointed defendant Kwun Luen Siu to replace him.

The complaint alleges, however, that the Company did not disclose that at the core of the $50 million private placement was massive self-dealing -- over 6 million of the shares to be sold were indirectly owned by defendant Li. Moreover, the complaint details, defendants did not disclose that defendant Li had recommended defendant Siu as his replacement and that, prior to being vetted by defendant Li for the role of China Energy CEO, defendant Siu had played an active role in facilitating defendants' self-dealing. According to the complaint, prior to the announcement of the Company's $50 million private placement, defendant Siu introduced the investment group that would underwrite the Company's $50 million private placement offering to defendant Li and the Company.

The lawsuit also charges that during the Class Period insiders sold their Company stock at artificially inflated prices, thereby reaping more than $114 million in proceeds.

The plaintiff is represented by Scott+Scott, a firm with significant experience in prosecuting investor class actions. The firm dedicates itself to client communication and satisfaction and currently is litigating major securities, antitrust and employee retirement plan actions throughout the United States. The firm represents pension funds, charities, foundations, individuals and other entities worldwide.

More information on this and other class actions can be found on the Class Action Newsline at http://www.primezone.com/ca



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