Administration May 9, 2005

Alstom Slapped With Class Action Governance Suit

September 29, 2003 (PLANSPONSOR.com) - The United Brotherhood of Electrical Workers Local 269 has filed a class action suit against French company Alstom S.A. for alleged violations of securities laws.
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In the suit, the union alleges the company was involved in a scheme to conceal problems Alstom was having in expanding its business unit.   This was done to prevent the decline in the price of the company’s stock for reasons that included protecting executive positions, raising money via a share offering in June 2001 and enhancing the value of the company director’s personal Alstom securities holdings, according to a news release from Scott + Scott, LLC, a representative of the Union.

Further, the complaint contends the company had a favorable perception to maintain in order to minimize the risks associated with its liquidity.   This enabled the company to raise the necessary financing to fund its business, that included increased bank borrowings and culminated in Alstom concealing the off-balance-sheet risk associated with guarantees on debt incurred by customers.

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The suit says such actions led to:

  • the gross overstatement of the company’s first half financial results for fiscal year 2000
  • an understatement of Alstom’s pension underfunding
  • concealing the company’s exposure to 60 separate asbestos lawsuits involving 6,500 plaintiffs that were responsible for financial overstatements worth €60 million.
Administration May 8, 2005

VRS Turns In 2.5% FY Performance

August 29, 2003 (PLANSPONSOR.com) - There are lots of smiles at the Virginia Retirement System (VRS) these days as the state public pension plan finished its most recent fiscal year with a 2.5% return.
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According to a VRS press release, the $34.6-billion fund was up 9% for the calendar year-to-date and a strong 11% for the most recent quarter. VRS said most of its year-to-date numbers came on the strength of its fixed-income position, which returned 10.4%, and its real estate program, which turned in a 7.4% return. Longer term, the fund was down 4.2% annualized for the three-year period and up 2.6% for the last five years.

The VRS portfolio had $16.4 billion invested in US equities, $5.4 billion in non-US equities, $8.3 billion in fixed income, $1.6 in real estate and $2.1 billion in private equity as of June 30. Both US and Non-US equities regained most of the losses experienced in the first half of the year to end with returns of 0.5% and -3.4% respectively. Private equity, which is reported with a one-quarter lag, was down 10.8%

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VRS provides benefits to almost 109,000 retirees and covers 311,000 active members

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