Shareholders in Borland?s Open Environment (OEC) unit have filed a class action lawsuit against it, alleging that repeated overstatements of revenue and income inflated its share price.
The acquired unit moved into losses shortly after Borland took it over in May this year for $64 million - a relatively high outlay for a company like Borland that currently only generates $215 million a year itself.
But, to make matters worse, shareholders now allege that Borland paid an inflated price for its purchase. The suit, filed in a US district court against OEC and 11 current and former directors and officers, claims that the firm had overstated revenues and income ever since its initial public offering in April 1995.
The case was brought on behalf of people and entities that had bought common OEC stock between 13 April 1995 and 10 October 1996, which included stock purchased during the initial public offering.
Borland was unavailable for comment.
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