Alan Rapoport, et al. v. Asia Electronics Holding Company...

UNITED STATES DISTRICT COURT- 1SOUTHERN DISTRICT OF NEW YORK

)ALAN RAPOPORT, On Behalf of Himself and All )Others Similarly Situated, ) CIVIL ACT N( .5 7 fig)

Plaintiff, ) CLASS ACTION COMPLAINT) FOR VIOLATIONS OF

vs. ) FEDERAL SECURITIES LAWS)

ASIA ELECTRONICS HOLDING CO., INC., DU ) JURY TRIAL DEMANDED e,tQUINGSONG, FAN BAIYAN, L; LIANJIE, )BARINGTON CAPITAL GROUP, L.P., andVALUE INVESTING PARTNERS, INC., )

—

Defendants. ) -

$S365-PC'

NATURE OF THE ACTION

1. This is a federal securities law class action that arises from an initial public

offering (the "IPO") of the common stock of Asia Electronics Holding Co., Inc. ("Asia

Electronics" or the "Company") that took place on or about eptembe; 2, 1997.

JURISDICTION AND VENUE

2. The claims asserted herein arise under and pursuant to Sections 11, 12(a)(2)

and 15 of the Securities Act of 1933, as amended (the "Securities Act") [15 U.S.C. §§ 77k,

771(2) and 77o].

3. This Court has jurisdiction over the subject matter of this action pursuant

to 28 U.S.C. §§ 1331 and 1337 and Section 22 of the Securities Act [15 U.S.C. § 77v].

4. Venue is proper in this District pursuant to Section 22 of the Securities Act

and 28 U.S.C. § 1391(b). Substantial acts in furtherance of the IPO occurred within this

District, and Asia Electronics has designated an agent for service within this District.

. .

5. In connection with the acts and omissions alleged in this complaint,

defendants, directly or indirectly, used the means and instrumentalities of interstate commerce,

including, but not limited to, the mails, interstate telephone communications, and the facilities

of the national securities markets.

PARTIES

6. Plaintiff Alan Rapoport purchased Asia Electronics common stock during

the Class Period, as set forth in the accompanying certification which is incorporated herein by

reference, and was damaged thereby.

7. Defendant Asia Electronics is a British Virgin Islands corporation with its

principal executive offices c/o Harney, Westwood & Riegels, P.O. Box 71, Road Town, Tortola,

British Virgin Islands.' Asia Electronics designs, develops and manufacturers deflection yokes

for sale to original equipment manufacturers of televisions and computer monitors. Deflection

yokes are devices that are attached to color picture tubes in televisions and computer monitors,

which control light beams and create visual images. The Company's major customers include

Daewoo Group, Toshiba, Sharp, Sanyo, Hitachi, Samsung, and Mitsubishi, among others.

Company operations are based in the city of Xianyang, Shaanxi Province, China.

8. (a) The individual defendants (thendividual Defendants"), at all times

relevant to this action, served in the capacities listed below and received substantial

compensation:

Asia Electronics has listed as its agent for service: CT Corporation Systems, 1633Broadway, New York, NY.

-2-

Name Position

Du Quingsong Chairman of the Board, Chief ExecutiveOfficer, and Director

Mary Xia Authorized representative in the UnitedStates, and a Board member

Fan Baiyan2Chief Financial Officer

Li Lianjie Vice Chairman, Chief Operating Officer,and a Board member

(b) The Individual Defendants, as senior officers and/or directors of Asia

Electronics, were controlling persons of the Company. Each exercised his power and influence

to cause Asia Electronics to engage in the acts and practices complained of herein. Each of the

Individual Defendants either individually or through an attorney-in-fact signed the Registration

Statement.

9. Defendants Barington Capital Group, L.P. and Value Investing Partners,

Inc. (collectively, the "Underwriter Defendants") substantially participated in the violations

alleged herein through their involvement in the IPO of Asia Electronics' securities. The

Underwriter Defendants were at all times entities engaged in the business of investment banking,

underwriting and selling securities to the investing public. The Underwriter Defendants were the

lead underwriters of the IPO, for which they received substantial fees. Prior to the IPO, the

Underwriter Defendants were required to and did conduct an investigation into the business,

operations, prospects, financial condition and accounting and management control systems of

Asia Electronics, known as a "due diligence investigation." In the course of such investigation,

the Underwriter Defendants would have obtained knowledge of the facts alleged herein if they

At some point after the IPO, Baiyan was replaced as the Company's CFO, by LiLei.

-3-

had acted with reasonable care. At all relevant times, defendants had a duty to promptly

disseminate truthful and accurate information with respect to Asia Electronics and its affairs.

SUBSTANTIVE ALLEGATIONS

Background Facts

10. Asia Electronics is a British Virgin Islands Company, incorporated in

January 1996, that develops and manufacturers deflection yokes for sale to manufacturers of

color televisions and computer monitors. Deflection yokes are electronic devices attached to

color picture tubes in television sets and computer monitors. Deflection yokes use

electromagnetic forces to aim red, green and blue light beams at a screen in the front of the

monitor or television screen. When light beams converge, various levels of intensity within each

beam create a picture on the screen, which varies in movement, color and shape according to the

video signal. All of the Company's sales are to original equipment manufacturers which

integrate the Company's deflection yokes into finished goods, or re-market them to other

equipment manufacturers. The Company's customers include Daewoo Corporation, Sanyo

Electric Co., Sharp-roxy Electronics Corp., Toshiba Corporation and IRICO Group, among

others. According to the Company, Asia Electronics is one of the largest independent

manufacturers of deflection yokes in the world.

11. Asia Electronics went public via an initial public offering of common stock

on September 25, 1997. Since that time, the Company has posted steadily improving financial

results and has completed numerous acquisitions of other companies -- using primarily the cash

raised during the IPO, as consideration for the acquisitions. The apparent success of the

Company was reflected in the price of Asia Electronics common stock, which rose from the

-4-

offering price of $8.00 per share, on September 25, 1997, to $14.13 per share on October 22,

1997.

Materially False and MisleadingRegistration Statement And Prospectus

12. On September 25, 1997, Asia Electronics conducted and completed an 1PO

of common stock, pursuant to a registration statement (the "Registration Statement") and

prospectus (the "Prospectus"), selling 4.6 million shares of common stock for $8.00 per share,

thereby raising $36.8 million, $34.2 million of which went directly to the Company, the

remainder of which went to pay the Underwriters. The IPO was co-managed by Barington

Capital Group, L.C. ("Barington") and Value Investing Partners, Inc. ("Value Partners"). In

connection with the IPO, the defendants, and other high-level officers of Asia Electronics, met

with institutional investors and other market participants to promote the IPO.

13. Also, on September 25, 1997, the Registration Statement and Prospectus,

issued in connection with the IPO, were declared effective by the SEC and the Company (and

certain selling shareholders) sold, through the Underwriters, 4,600,000 shares of Asia Electronics

common stock for $8.00 per share or total proceeds of $36,800,000. In addition, the

Underwriters were granted a 45-day over-allotment option to purchase an additional 690,000

shares Of Asia Electronics common stock. The Prospectus was materially false and-misleading

for several reasons.

14. The Prospectus portrayed the Company as being in compliance with all

laws, both domestic and international (i.e., complaint with the laws of China and the British

Virgin Islands), stating in pertinent part, the following:

The Chinese legal system is based on written statutes and, unlikecommon law systems, decided legal cases in China have littleprecedential value. In 1979, China began the process of developing

-5-

its legal system by undertaking to promulgate a comprehensivesystem of laws. On December 1993, the National People'sCongress promulgated the Company Law of The People's Republicof China. Pursuant to Company Law, the State Council issued the"PRC Special Regulations on Oversees Offering and Listing ofShares by Joint Stock Limited Companies" to regulate joint stocklimited companies that offer and list their shares oversees. TheCompany Law, the rules and regulations promulgated under it andlegal prescriptions relating to Chinese companies provide the coreof the legal framework governing the corporate behavior ofcompanies, such as the Company's subsidiaries, and their directors and shareholders. Because these laws, re gulations and legalrequirements are relatively recent, their interpretations andenforcement involve si gnificant uncertainty. [Emphasis added.]

This statement was materially false and misleading because it failed to disclose that when the

Company filed its Prospectus and Registration Statement it was in violation of the "PRC Special

Regulations on Oversees Offering and Listin g of Shares by Joint Stock Limited Companies (the

"Special Regulations - ). Therefore, at the time of these filings, and at the time of the offering,

the Company lacked the authority under Chinese law to sell shares of the Company in the United

States.



Virgin Islands). The Company encouraged investor reliance upon the alleged compliance by

stating, among other things, the following:

Certain legal matters will be passed upon for the Company as tothe U.S. law by Proskauer Rose LLP, New York, and as to China law by Jun He Law Office, Beijing, Peoples Republic of China. The validity of the shares of Common Stock offered by thisProspectus and certain other le gal matters are being passed on forthe Company by Harney, Westwood & Rie gels as to British VirginIslands Law. Certain legal matters will be passed upon for theUnderwriters by Kramer, Levin, Naftalis & Frankel, New York, New York and with respect to matters of Chinese law, by theGreat Wall Law Offices, Shanghai. People's Republic of China[Emphasis added.]

-6-



Regulations on Oversees Offering and Listing of Shares by Joint Stock Limited Companies (the

"Special Regulations"). Therefore, at the time of these filings, and at the time of the offering,


States.

16. The Prospectus encouraged foreign reliance upon the relatively new, but

rapidly growing body of Chinese corporate law, and the Company's compliance therewith. The

Company created the false and misleading impression that Chinese law was advanced to the point

that foreign investors could enjoy substantial protection under Chinese corporate law, and that

the Company was in compliance with such laws. This misplaced reliance was again encouraged

by the false and misleading Prospectus which stated, in part, the following:

The PRC's legal system is based on written statutes under whichprior court decisions may be cited as authority but do not havebinding precedence. The PRC's legal system is relatively new, andthe government is still in the process of developing acomprehensive system of laws, a process that has been ongoingsince 1979. Considerable progress has been made in thepromuleation of laws and regulations dealing with economic matters such as corporate organization and governance, foreigninvestment. commerce, taxation and trade. Such legalization hassignificantly enhanced the protection afforded to foreign investors. However, experience with respect to the implementation,interpretation and enforcement of such laws is limited. [Emphasisadded.]

This statement was materially false and misleadin g because it failed to disclose that when the


Regulations on Oversees Offering and Listing of Shares by Joint Stock Limited Companies (the

"Special Regulations - ). Therefore, at the time of these filings, and at the time of the offeTing,

-7-


States.



Virgin Islands). The Company encouraged investor reliance upon the alleged compliance by

stating, among other things, the following:

The Companies conduct their operations in the PRC andaccordingly are subject to special considerations and significantrisks not typically associated with investments in equity securitiesof United States and Western European companies. These includethe risks associated with, amon g other things, the political.economic, le gal environments and foreign currency exchange.These risks are described further [herein].



Regulations on Oversees Offerin g and Listing of Shares by Joint Stock Limited Companies (the

"Special Regulations"). Therefore, at the time of these filings, and at the time of the offering.


States. The fact that the Company misrepresented its authority to sell stock in the United States,

when in fact it did sell such stock, is not the type of risk anticipated by the cautionary statement

reprinted above.

The Truth Begins To Emerge

18. On July 16, 1998, Asia Electronics shocked the market by issuing a press

release, published on Business Wire, in which it announced that the Company had been informed

that its Chairman, defendant Du, was being questioned by the Disciplinary Committee of the

Municipal Communist Party in Xianyan g.. China, where Asia Electronics' operatic:1s are

-8-

conducted. The Company reported that it had not been in contact with Du during his

questioning. which had begun earlier in the month.

19. The market's reaction to the July 16, 1998, announcement was quick and

decisive. On almost 8 times average trading volume, the market price of Asia Electronic

common stock declined almost 30% the next trading day, July 17, 1998, as the price of Asia

Electronics common stock fell from $3.50 per share to $2.88 per share.

20. About a week later, on July 24, 1998, the Company announced additional

disturbing news. On this day the Company issued a press release, published on Business Wire

in which it announced that not only had defendant Wu been detained in China, but also that the

Company's Chief Financial Officer, Li Lei, had also been detained for questioning by the

Disciplinary Committee, and he too was out of communication with the Company.

21. For shareholders. the most disturbing news was yet to come. On July 24,

1998, the Washington Post reported that the reason that the CEO and CFO had been detained

by the Disciplinary Committee was because the September 25. 1997 IPO was in violation of

Chinese law. The Post reported that. la]ccordina to an official for the party's Propaganda

Bureau in Xianyana Du was detained July 2 because Asia Electronic's public offerina on the

Nasdaq Stock Market broke Chinese_law. The official, reached by telephone from Beijing, said

local investi gators launched a probe following a request from China's Stock Exchange Executive

Council, which oversees China's fledgling capital markets." According to the Post. an official

at the Beijin g -based Stock Exchange Executive Council said it was not clear whether Asia

Electronics followed Chinese law when its shares were listed on the Nasdaq in September.

22. Again the market's reaction to the disturbing news about Asia Electronics

was quick and decisive. Again on significant volume, the market price of Asia EleLlif.ir,;L•

-9-

common stock declined to a new 52 week low of $2.38 per share. As the market digested this

news over the next two or three trading days the market for Asia Electronics common stock

collapsed, as the stock traded to another 52 week low of $1.63 on July 29, 1998.

No Safe Harbor

23. The statutory safe harbor provided for forward-looking statements under

certain circumstances does not apply to any of the allegedly false statements pleaded in this

complaint. The specific statements pleaded herein were not identified as "forward-looking

statements" when made. Nor was it stated with respect to any of the statements forming the

basis of this complaint that actual results "could differ materially from those projected." To the

extent there were any forward-lookin g statements, there were no meaningful cautionary

statements identifying important factors that could cause actual results to differ materially from

those in the purportedly forward-looking statements. Alternatively, to the extent that the

statutory safe harbor does apply to any forward-looking statements pleaded herein, defendants

are liable for those false forward-looking statements because at the time each of those forward-

looking was made the particular speaker knew that the particular forward-looking statement was

false, and/or the forward-looking statement was authorized and/or approved by an executive

officer of Asia Electronics who knew that those statements were false when made.

PLAINTIFF'S CLASS ACTION ALLEGATIONS

24. Plaintiff brings this action as a class action pursuant to Federal Rule of

Civil Procedure 23(a) and (b)(3) on behalf of a Class, consisting of all persons who purchased

or otherwise acquired Asia Electronics common stock pursuant or traceable to the IPO which

took place on September 25, 1997 (the "Class Period"), and who were damaged thereby.

Excluded from the Class are defendants. members of the immediate family of each of the

- 10 -

Individual Defendants, any subsidiary or affiliate of Asia Electronics and the directors, officers

and employees of Asia Electronics or its subsidiaries or affiliates, or any entity in which any

excluded person has a controlling interest, and the legal representatives, heirs, successors and

assigns of any excluded person.

25. The members of the Class are so numerous that joinder of all members is

impracticable. While the exact number of Class members is unknown to plaintiff at this time and

can only be ascertained through appropriate discovery, plaintiff believes that there are thousands

of members of the Class located throughout the United States. As of December 31, 1997, there

were reportedly more than 10 million shares of Asia Electronics common stock outstanding.

4.6 million share of which were issued by the Company in the September 1997 IPO. An

additional 690,000 shares were granted to Underwriters in a 45-clay over-allotment option, which

allowed Underwriters to purchase the additional shares. Prior to the September 1997 IPO, there

was no public market for Asia Electronics common stock. Throughout the Class Period. Asia

Electronics common stock was actively traded on the Nasdaq National Market System. Record

owners and other members of the Class may be identified from records maintained by Asia

Electronics and/or its transfer a gents and may be notified of the pendency of this action by mail,

using a form of notice similar to that customarily used in securities class actions.

26. Plaintiff's claims are typical of the claims of the other members of the

Class as all members of the Class were similarly affected by defendants' wrongful conduct in

violation of federal law and state law that is complained of herein.

27. Plaintiff will fairly and adequately protect the interests of the members of

the Class and have retained counsel competent and experienced in class and securities litigation.

- 11 -

28. Common questions of law and fact exist as to all members of the Class and

predominate over any questions solely affecting individual members of the Class. Among the

questions of law and fact common to the Class are:

- (i) whether the federal securities laws were violated by defendants' acts

and omissions as alleged herein;

(ii) whether defendants participated in and pursued the common course

of conduct complained of herein;

(iii) whether the Registration Statement and Prospectus disseminated to the

investing public and the Company's shareholders durin g the Class Period misrepresented material

facts about the business, finances, financial condition and prospects of Asia Electronics; and

(iv) to what extent the members of the Class have sustained damages and

the proper measure of damages.

29. A class action is superior to all other available methods for the fair and

efficient adjudication of this controversy since joinder of all members is impracticable. Further-

more, as the damages suffered by individual Class members may be relatively small, the expense

and burden of individual liti gation make it impossible for members of the Class to individually

redress the wrongs done to them. There will be no difficulty in the management of this suit as

a class action.

BASIS OF ALLEGATIONS

30. Plaintiff has alleged the foregoing based upon the investigation of his

counsel, which included a review of Asia Electronics SEC filings, regulatory filings and reports,

securities analysts reports and advisories about the Company, press releases and other public

statements issued by the Company, media reports about the Company, and believe that substantial

- 1") -

additional evidentiary support will exist for the allegations set forth herein after a reasonable

opportunity for discovery.

COUNT I

[Against MI Defendants For ViolationsOf Section 11 Of The Securities Actl

31. Plaintiff repeats and realleges each and every allegation contained above.

32. This Count is brought pursuant to Section 11 of the Securities Act, 15

U.S.C. § 77k, on behalf of the Class, against all defendants.

33. The Registration Statement for the IPO was inaccurate and misleading.

contained untrue statements of material facts, omitted to state other facts necessary to make the

statements made not misleading, and concealed and failed adequately to disclose material facts

as described above.

34. The Company is the registrant for the IPO. The defendants named herein

were responsible for the contents and dissemination of the Registration Statement and the

Prospectus.

35. As issuer of the shares, Asia Electronics is strictly liable to plaintiffs and

the Class for the misstatements and omissions.

36. None of the defendants named herein made a reasonable investigation or

possessed reasonable grounds for the belief that the statements contained in the Registration

Statement and the Prospectus were true and without omissions of any material facts and were not

misleading.

37. Defendants issued, caused to be issued and participated in the issuance of

materially false and misleading written statements to the investing public which were contained

in the Prospectus, which misrepresented or failed to disclose, inter alia. the facts set forth above.

- 13 -

By reasons of the conduct herein alleged, each defendant violated, and/or controlled a person

who violated, Section 11 of the Securities Act.

38. Plaintiff acquired Asia Electronics shares issued pursuant to, or traceable

to, and in reliance on, the Registration Statement.

39. Plaintiff and the Class have sustained damages. The value of Asia

Electronics shares has declined substantially subsequent to and due to defendants' violations.

40. At the times they purchased Asia Electronics shares, plaintiff and other

members of the Class were without knowled ge of the facts concerning the wrongful conduct

alleged herein and could not have reasonably discovered those facts prior to July 24, 1998. Less

than one year elapsed from the time that plaintiffs discovered or reasonably could have

discovered the facts upon which this complaint is based to the time that plaintiffs filed their

Complaint. Less than three years elapsed from the time that the securities upon which this Count

is brought were bona fide offered to the public to the time plaintiffs filed their Complaint.

COUNT II

[Against All Defendants For Violations OfSection 12(a)(21 Of The Securities Actj


42. This Count is brought by plaintiff pursuant to Section 12(a)(2) of the

Securities Act on behalf of all purchasers of Asia Electronics shares in connection with, and

traceable to, the IPO.

43. Defendants were sellers, offerors, and/or solicitors of sales of the shares

offered pursuant to the September 25, 1997 Prospectus.

44. The Prospectus contained untrue statements of material facts, omitted to

state other facts necessary to make the statements made not misleading, and concealed and failed

- 14 -

to disclose material facts. Defendants' actions of solicitation included participatin g in the

preparation of the false and misleading Prospectus.

45. The defendants owed to the purchasers of Asia Electronics shares, including

plaintiff and other class member purchasers of Asia Electronics shares, the duty to make a

reasonable and diligent investigation of the statements contained in the IPO materials, including

the Prospectus contained therein, to insure that such statements were true and that there was no

omission to state a material fact required to be stated in order to make the statements contained

therein not misleading . These defendants knew of, or in the exercise of reasonable care should

have known of, the misstatements and omissions contained in the Offering materials as set forth

above.

46. Plaintiff and other members of the Class purchased or otherwise acquired

Asia Electronics shares pursuant to and traceable to the defective Prospectus. Plaintiff did not

know, or in the exercise of reasonable diligence could not have known, of the untruths and

omissions contained in the Prospectus.

47. Plaintiff, individually and representatively, hereby offer to tender to

defendants those securities which plaintiff and other Class members continue to own, on behalf

of all members of the Class who continue to own such securities, in return for the consideration

paid for those securities together with interest thereon.

48. By reason of the conduct alleged herein, these defendants violated, and/or

controlled a person who violated, § 12(a)(2) of the Securities Act. Accordingly, plaintiff and

members of the Class who hold Asia Electronics shares purchased in the IPO have the right to

rescind and recover the consideration paid for their Asia Electronics shares and, hereby elect to

- 15 -

rescind and tender their Asia Electronics shares to the defendants sued herein. Plaintiff and Class

members who have sold their Asia Electronics shares are entitled to rescissory damages.

49. Less than three years elapsed from the time that the securities upon which

this Count is brought were sold to the public to the time of the filing of this action. Less than

one year elapsed from the time when plaintiff discovered or reasonably could have discovered

the facts upon which this Count is based to the time of the filing of this action.

COUNT III

[Against The Individual Defendants ForViolations of Section 15 of the Securities Acti


51. This Count is brought pursuant to Section 15 of the Securities Act against

the Individual Defendants.

52. Each of the Individual Defendants was a control person of Asia Electronics

by virtue of their positions as directors and/or as senior offices of Asia Electronics. The

Individual Defendants also served on Asia Electronics Board of Directors. Finally, the

Individual Defendants each had a series of direct and/or indirect business and/or personal

relationships with other directors and/or major shareholders of Asia Electronics.

53. Each of the Individual Defendants was a culpable participant in the

violations of Sections 11 and 12(a)(2) of the Securities Act alleged in Counts I and II above,

based on their having signed the Registration Statement and having otherwise participated in the

process which allowed the Offering to be successfully completed.

- 16 -

'WHEREFORE, plaintiff prays for relief and judgment, as follows:

(i) Determining that this action is a proper class action, designating plaintiff

as Lead Plaintiff and certifying plaintiff as class representative under Rule 23 of the Federal

Rules of Civil Procedure and their counsel as Lead Counsel;

(ii) Awarding compensatory damages in favor of plaintiff and the other Class

members against all defendants, jointly and severally, for all damages sustained as a result of

defendants' wrongdoing, in an amount to be proven at trial, including interest thereon;

(iii) Awarding plaintiff and the Class their reasonable costs and expenses

incurred in this action, including counsel fees and expert fees; and

(iv) Such other and further relief as the Court may deem just and proper.

JURY TRIAL DEMANDED

Plaintiff hereby demands a trial by jury.

DATED: New York, New YorkAugust Lt. 1998

MILBERG WEISS BERSHADHYNES & LERACH LLP

B :Steven . Schulman (SS 2561)Samuel H. Rudman (SR 7957)Michael A. Swick

One Pennsylvania PlazaNew York, NY 10119-0165(212) 594-5300

Attorneys for Plaintiff

- 17 -

entryzirrcars011:2 Q-‘w 3f21(

pipladatiff.) declares, as to the

clalus esseereed under tbe federal securities lawm, theta

1. Plaintiff has reviewed the complaint prepared by

counsel in tbe above-captioned case =gibes authorized its

filing.

3. Plaintiff did not pur WIChase . securities that are .

the smbject of the complaint at the direction of plaintiff's

counsel or is order to participate in any private actien arising

under tbe federal socurities

3. Pleintiff is willing to serve as a representative

party ce behalf of • class. including providing testimony at

deposition and trial, if IseceevarY-

4. burins the prenoeed Class Period, plaintiff

executed transactions in the !securities of Asia Electronics

Holding Co., Eno. as follows: fee Attecbsd Schedule.

S. En the past three years, plaintiff baa not sought

to womb am a representative party oft rel f of a claim in an

action filed wades Cbe federal securities 140.8.

4. Plaintiff will not oonept any mutant for serving

as a repreemmattoe pasty on behalf of a clam beyond plaintiff's

Pro rota Wore pf anr recovery , except suds reasonable coleys and

expenses (including loot wages) directly relating to the

representattne 04 the Case as ordered or approved by the Court.

X asclare undser penalty of porluzy tha t. forsgoix4

is crus sad correct. Irocoeuted this yI • 11941 .

//Airar Ps"-

ScheduleAlan Rapoport Transaction(s) in

Asia Electronics Holding Co., Inc., Securities

Purchase(s):

Date Units Price

9/25/97 750 shares $ 8.00

9/25/97 750 shares $ 8.00

9/25/97 750 shares $ 8.00

10/01/97 3000 shares $13.94

10/15/97 250 shares $13.13

Sale(s):

Date Units Price

....„-.--,.,.',.,, CIVIL COVER SHE

REV .1-49.7

' 8: Mira 5 7 85JS 44C/SONY....... ',,,:,i 3......j),)is_al't,_,F,t..i wri.iii., and 161 „gw44.41.0.n eenowypd h..4,4, rywitypt 14914C• NY 11440044.44.1 I,s4 41Ing and 104N/K0 O f 01440.N4j' ' .g ',. '' ,.i i •`:..;;",,A4,-••. 1.. •. t „,_ .7.,5,z ..-- s - of 10 000.1,4 04 r0Q44/40 04 law. 4/44001 KS prfrotOed by 10Ce1 f t464 of COteI 11611 fardt. a pproved ov the Juakoal Conlerent• of

V, .; t.;,,r6 •r• - In* Undid Stelae et Sipco/Tale, I 974. ts reotered f Or us• of Irte Clerk of Court 104 IN0 01000$4 01 •Ntlatang 1flf Cno4 [locket 111111

....•;‘,PLAINTIFFS ALAN RAPUPORE, ON Bt.NALt ut HIMbL4 ,P' - o yo.1 • • - -II' • 1 I I v.,AND ALL OTHERS SIMILARLY SITUATED. 440i' DU QUINGSONG, FAN BAIYAN, LI LIANJIE, BAF

.10,,‘)A% TON CAPITAL GROUP, L.P., & VALUE INVESTI ATTORNEYS IFITUCINAME ADDRESS. AND- TELEPHONE NUMBER ATTORNEYS BF KNOWN/ PARTNERS, INC.MILBERG WEISS BERSHAD WINES & LERACH LLPONE PENNSYLVANIA PLAZANEW YORK, NEW YORK 10119-0165 (212) 594-5300 CAUSE OF ACTION (CITE THE U.S. CIVIL STATUTE UNDER WHICH YOU ARE RUNG AND WRITE A BRIEF STATEMENT OF CAUSE/CLAIMS UNDER SECS. 11,12(a)(2) AND 15 OF THE SECURITIES ACT OF 1933 [15 U.S.C. SEC. 77k,771(2) AND 77o], 28 U.S.C. SECS. 1331 AND 1337 AND SEC. 22 OF THE SECURITIES ACT [15 U.S.SEC. 77v1

Has this or a simile( case been previously Tiled in SDNY at anytime? No? al Yes? 0 Judge Previously Assigned

If yes, was this case Vol. 0 Invol. 0 DiSm1SSed. NO 0 Yes 0 It yes. give date 6 Case No.

(PLACE AN 1k1 IN ONE BOX ONL Y/ NATURE OF SUIT

ACTIONS UNDER STATUTESCONTRACT TORTS FORFEITURE/PENALTY BANKRUPTCY OTHER STATUTES

1 110 INSURANCE PERSONAL INJURY PERSONAL INJURY I I 400 STATE1 i 20 MARINE I ($10 AGRICULTURE REAPPORT1ON6EN1 130 74ILLER ACT I 620 FOOD Ji. DRUG ( j 410 ANTRIM1 140 NEGOTIABLE ((SIC AIRPLANE 1 1 163 PERSONAL INJURY • ((62$ DRUG RELATED 1 1 422 APPEAL I I 4)0 BANKS & RANKIN(

INSTRUMENT I 1 315 AIRPLANE PRODUCT MED MALPRACTICE SEIZURE OF 28 USC 158 I I 450 Co/AMERCE/ICC

LIABILITY 1 1 365 PERSONAL INJURY PROPERTY ( ) 423 WITHDRAWAL RATESETCI 150 RECOVERY OF 1 120 ASSAULT. LIBEL & PRODUCT LIABILITY 21 USC Mi 28 USC 157 II 460 DEPORTATION

OvERPAYMENT IL SLANDER (I 3611 ASBESTOS PERSONAL ) 630 UQUOR LAWS 11 470 RACKETEER INFUJENFORCEMENT OF I 330FEDERAL EMPLOYERS' INJURY PRODUCT i 640 RE & TRUCK ENCED k COILIttelJUDGMENT LIABILITY LLABILITY II 650 AIRLINE !LEGS PROPERTY RIGHTS ORGANIZATION AC

1 151 MEDICARE ACT 1) 340 MARINE 1) 660 OCCUPATIONAL (RICO)1 I 52 RECOVERY Of II345 MARINE PRODUCT PERSONAL PROPERTY SAFETY/HEALTH 1 1 820 COPYRIGHTS 1 1 810 SELECTIVE SERV1C

DEFAULTED LIABITTY 1) 690 OTHER I I 830 PATENT ;VP° SECURITIES/STUDENT LOANS 1 150 MOTOR VEHICLE I / 370 OTHER FRAUD ' (I $40 TRADEMARK COMMODITIES/(EXCL VETERANS) 11150 MOTOR VEHICLE 1 j 171 TRUTH IN LENDING EXCHANGE

I 153 RECOVERY OF PRODUCT i 1 310 OTHER PERSONAL 1 I 175 CUSTOMEROVERPAYMENT OF LIABILITY PROPERTY DAMAGE LABOR SOCIAL SECURITY CHALLENGEvETERANS 11160 OTHER PERSONAL I 1 315 PROPERTY DAMAGE :2 USC 3410

•BENEFITS INJURY PRODUCT (1710 FAIR LABOR 1 $6 i MIA (1399T) ( I 191 AGRICULTURE ACT

I i 60 STOCKHOLDERS UAB(UTY STANDARDS ACT IJ $62 BLACK LUNG (921) 1 I 192 ECONOMICSUITS II 720 LABOR/MG/4T II 86) DIWC (4054)1 STABILIZATION

I 190 OTHER CONTRACT /LELA noNs H $61 DIWW (405(0 ACTj195 CONTRACT I ( 7)0 LABOIUMGMT II 864 SSID TITLE 1 1 $01 ENVIRONMENTAL

PRODUCT REPORTING k XVI MATTERS

LIABILITY DISCLOSURE 1) $6 4 RS1(4050(11 ) 1 194 ENERGY

ACT ALLOCATION ACT

ACTIONS UNDER STATUTES 1) 740 RAILWAY LABOR II WI FREEDOM Of

ACT FEDERAL TAX SUITS INFORMATION ACT

REAL PROPERTY CIVIL RIGHTS PRISONER PETITIONS 1 790 OTHER LABOR 1 1000 APPEAL OF FEE

LITIGATION II 870 TAXES DETERMINATION

1 210 LAND 1 1 441 VOTING 1 1 510 MOTIONS TO 1 70i EMPL LET INC 1 1 1171 iRS ., THIRD PARTY UNDER EQUAL

CONDEMNATION II 447 EMPLOYMENT VACATE SECURITY ACT 20 USC 7609 AccEss To ourncE

I 220 FORECLOSURE II 443 HOUSING/ SENTENCE II 950 CONSTITUTIONAUT

I 210 RENT LEASE ACCOMMODATIONS 20 USC 2255 Of STATE STATUTE!

00& EJECTMENT (I 444 wELFARE ii 5 10 HABEAS CORPUS 1 I 1 OTTIER STATUTOR Y

I 240 TORTS TO LAND 1 1 440 Onait CICIVILI I 1 1 5 DEATH PENALTY ACTIONS

1 246 TORT PRODUCT RIGHTS II 440 MANDAMUSLIABILITY BOTHER

1 290 ALL OTHER 1 1 4 40 CIVIL RIGHTSREAL PROPERTY II 445 PRISON CONDITION

' Check i 1 demanded in complaint:

/CHECK IF THIS IS A CLASS ACTION DO YOU CLAIM THIS CASE IS RELATED TO A CIVIL CASE NOW PENDiNG IN SONY.?UNDER F.R.C.P. 23 IF SO, STATE:

"DEMAND S OTHER JUDGE DOCKET NUMBER

Check YES only if chime ed in complaint

JURY DEMAND: YES 0 NO NOTE: Please submit at the time of filing an explanation of why cases P _

deemed related.

FSEE REVERSEI

SCHEDULE "AC'

ASIA ELECTRONICS HOLDING CO., INC.c/o Harney, Westwood & RiegelsP.O. Box 71 Road TownTortola, British Virgin Islands

DU QUINSONGc/o Harney, Westwood & RiegelsP.O. Box 71 Road TownTortola, British Virgin Islands

FAN BAIYANc/o Harney, Westwood & RiegelsP.O. Box 71 Road TownTortola, British Virgin Islands

LI LIANJIEc/o Harney, Westwood & RiegelsP.O. Box 71 Road TownTortola, British Virgin' Islands

BARINGTON CAPITAL GROUP, L.P.c/o Harney, Westwood & RiegelsP.O. Box 71 Road TownTortola, British Virgin - Islands

VALUE INVESTING PARTNERS, INC.c/o Harney, Westwood & RiegelsP.O. Box 71 Road TownTortola, British Virgin Islands

Alan Rapoport, et al. v. Asia Electronics Holding Company...

Documents

Transcript of Alan Rapoport, et al. v. Asia Electronics Holding Company...