Robbins Umeda LLP Announces an Investigation of Subaye, Inc
Robbins Umeda LLP, a shareholder rights litigation firm, is interested in helping shareholders of Subaye, Inc. (NASDAQ: SBAY). The firm has commenced an investigation into possible breaches of fiduciary duty and other violations of federal securities laws by certain officers and directors at Subaye. Subaye provides video advertising and entertainment media services to small and medium sized enterprises in China. The company was founded in 1997, is headquartered in Guangzhou, the People’s Republic of China, and is incorporated in Delaware.
Robbins Umeda LLP’s investigation is focused on whether the officers and directors of Subaye have breached their fiduciary duties to shareholders by issuing materially false financial statements and information to investors.
On April 7, 2011, the company disclosed details concerning the resignation of its auditor, PricewaterhouseCoopers Hong Kong (“PwC”). PwC identified several matters that it claims may materially impact the fairness or reliability of Subaye’s quarterly financial information for the three months ended December 31, 2010, and may have caused PwC to be unwilling to rely on management’s representations. The matters PwC identified include: (i) PwC’s “inability to obtain information and/or supporting documentation to verify cash settlements from sales agents to the Company”; (ii) PwC’s “inability to obtain information and/or supporting documentation to verify the end customer subscriptions for the Company’s services or the services rendered by the Company to the end customers;” (iii) “[i]nadequate documentation to substantiate the marketing and promotion activities performed by sales agents in return for fees paid to such agents and recorded as expenses of the Company;” (iv) “[i]nsufficient explanations by the Company regarding certain commonalities between certain customers and vendors;” and (v) no “evidence of any business tax payments by the Company for services rendered in China.”
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