Robbins Geller Rudman & Dowd LLP Files Class Action Suit Against Graña y Montero S.A.A.

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Mar 23, 2017, 22:00 ET

NEW YORK, March 23, 2017 /PRNewswire/ -- Robbins Geller Rudman & Dowd LLP ("Robbins Geller") (http://www.rgrdlaw.com/cases/granaymontero/) today announced that a class action has been commenced on behalf of purchasers of Graña y Montero S.A.A. ("Graña y Montero") (NYSE: GRAM) American Depositary Shares ("ADSs") during the period between July 24, 2013 and February 24, 2017, inclusive (the "Class Period"). This action was filed in the Eastern District of New York and is captioned Goldberg v. Graña y Montero S.A.A., et al., No. 17-cv-01643.

If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from February 27, 2017. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel, Samuel H. Rudman or David A. Rosenfeld of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at [email protected]. If you are a member of this class, you can view a copy of the complaint as filed at http://www.rgrdlaw.com/cases/granaymontero/. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.

The complaint charges Graña y Montero and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Graña y Montero is a Peruvian corporation that provides engineering and construction, infrastructure, real estate, and technical services in Latin America.

Odebrecht S.A. ("Odebrecht") is a global construction conglomerate based in Brazil. The complaint alleges that one of Graña y Montero's subsidiaries was part of a consortium led by Odebrecht and that between 2005 and 2014, Graña y Montero generated millions of dollars in revenues from various construction and real estate contracts which had been procured through the payment of bribes paid by Odebrecht.

The complaint alleges that throughout the Class Period, Graña y Montero concealed the illegal source of its revenues and, as a result, Graña y Montero ADSs traded at artificially inflated prices, reaching a Class Period high of more than $22 per ADS by September 19, 2013. The complaint further alleges that based on defendants' deception, Graña y Montero sold $475 million of the ADSs in a July 24, 2013 initial public stock offering.

The complaint alleges that through a series of partial disclosures between December 2016 and February 2017, the market learned of the illegal source of Graña y Montero's revenues, causing the price of its ADSs to decline precipitously.

First, on December 21, 2016, the U.S. Department of Justice ("DOJ") announced that Odebrecht and another company had pled guilty and agreed to pay a combined total penalty of at least $3.5 billion to resolve charges with U.S., Brazilian and Swiss authorities for paying millions of dollars in bribes to government officials around the world. According to a criminal information filed the same day by the DOJ and the U.S. Attorney's Office for the Eastern District of New York, which charged Odebrecht with conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act ("FCPA"), Odebrecht paid approximately $29 million in bribes to Peruvian government officials to secure public works contracts between 2005 and 2014. The DOJ complaint alleged that Graña y Montero had been one of Odebrecht's most important Peruvian partners, working with it on half a dozen public works contracts worth more than $10 billion. The price of the ADSs fell by more than $5 on this news.

Then on January 12, 2017, Graña y Montero announced that it was withdrawing from its partnership with corruption plagued Odebrecht, calling the partnership a "mistake," causing the price of the ADSs to fall another 12%.

Then on January 20, 2017, Reuters announced that "[a] consortium controlled by Brazilian builder Odebrecht S.A. [would] miss a financing deadline . . . for a natural gas pipeline project in Peru" valued at $5 billion in which Graña y Montero owned a 20% interest.

Then on January 25, 2017, citing the loss of the Odebrecht partnership, Graña y Montero disclosed it would ask its Board of Directors to approve the sale of $300 million in assets to help it meet its obligations after losing the Odebrecht partnership as a result of the graft scandal.

Then on February 16, 2017, Reuters reported that an "ombudsman" had "called for prosecutors to investigate Peruvian builder Grana y Montero and other partners of Brazil's construction conglomerate Odebrecht in a corruption probe that has already sunk Grana's shares."

Finally, on February 24, 2017, a local news magazine, Hildebrandt en sus trece, reported that Graña y Montero knew about the $20 million in bribes paid to former President Alejandro Toledo by Odebrecht. This disclosure caused the price of the ADSs to decline another 35%.

The complaint alleges that as a result of their purchases of Graña y Montero ADSs during the Class Period, members of the Class suffered economic loss, i.e., damages, under the federal securities laws.

Plaintiff seeks to recover damages on behalf of all purchasers of Graña y Montero common stock during the Class Period (the "Class"). The plaintiff is represented by Robbins Geller, which has extensive experience in prosecuting investor class actions including actions involving financial fraud.

Robbins Geller is widely recognized as one of the leading law firms advising U.S. and international institutional investors in securities litigation and portfolio monitoring. With 200 lawyers in 10 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history and was ranked first in both total amount recovered for investors and number of securities class action recoveries in ISS's SCAS Top 50 Report for the last two years. Robbins Geller attorneys have shaped the law in the areas of securities litigation and shareholder rights and have recovered tens of billions of dollars on behalf of the Firm's clients. Robbins Geller not only secures recoveries for defrauded investors, it also strives to implement corporate governance reforms, helping to improve the financial markets for investors worldwide. Please visit www.rgrdlaw.com/cases/granaymontero/ for more information.

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SOURCE Robbins Geller Rudman & Dowd LLP