After China Fire & Security Group, Inc. announced that its board received a proposal to acquire all outstanding shares of China Fire & Security Group (NASDAQ CFSG) common stock an investigation on behalf of investors of China Fire & Security Group, Inc. (NASDAQ:CFSG) over possible breaches of fiduciary duty was announced.

The investigation by a law firm concerns whether certain directors and officers at China Fire & Security Group, Inc. (Public, NASDAQ:CFSG)and others breached or will breach their fiduciary duties in connection with proposed takeover.

On Monday, March 7, 2011, China Fire & Security Group, Inc. (Nasdaq:CFSG) announced that the Special Committee of its Board of Directors has received a non-binding letter from a leading global private equity firm, pursuant to which the private equity firm proposes to acquire all of the outstanding shares of common stock of China Fire& Security Group, Inc in cash at a price which represents a premium over the current stock price.
However almost 60% of Nasdaq:CFSG shares are held by certain officers and directors of China Fire & Security Group, Inc.
In addition China Fire & Security Groups performance for its investors was increasing. China Fire & Security Groups 12months Total Revenue went from $32.45million in 2006 to $81.18million in 2009. Its Net Income went from $6.97million in 2006 to $24.41million in 2009. China Fire & Security Group, Inc. reported for the first three quarters in 2010 a combined nine months Total Revenue of $68.59million with a combined nine months Net Income of $17.51million.

Shares of China Fire & Security Group, Inc. (NASDAQ:CFSG) traded on Friday, March 4 at roughly $6.30 per share and increased in response to the takeover proposal to over $7 per share. But CFSG shares traded as recently as November and October 2010 over $8.70, and in March 2010 as high as $15.80 per share. During 2009 CFSG shares reached $19.02 per share.

Therefore the investigation monitors and concerns whether China Fire & Security Group Board of Directors will undertake an adequate and fair sales process in the event of a takeover to obtain the maximized consideration for all shareholders of China Fire & Security Group, Inc. (NASDAQ:CFSG) and will breach their fiduciary duties to China Fire & Security Group (CFSG) shareholder by failing to adequately shop the Company before entering into any transaction. A potential class action lawsuit would seek to maximize the amount of money and information for NASDAQ CFSG shareholders would receive in a buyout, so the law firm.