An investor in China Security & Surveillance Tech. Inc. (NYSE:CSR) filed a lawsuit against the CEOs buyout proposal alleging breaches of fiduciary duty.

According to the complaint the plaintiff alleges that CEO Guoshen Tu and several directors breached their fiduciary duty to investors in CSR shares arising out of their attempt to sell the China Security & Surveillance Tech. Inc. at an unfair price via an unfair process.

On Tuesday March 8, 2011 China Security & Surveillance Technology, Inc. (NYSE: CSR) had announced that its Board of Directors has received a non-binding proposal letter from its Chairman and Chief Executive Officer, Mr. Guoshen Tu, for Mr. Tu to acquire all of the outstanding shares of China Security & Surveillance Technology, Inc. (NYSE: CSR) common stock not currently owned by Mr. Tu, certain members of the management and their affiliated entities, in a going private transaction for $6.50 per share in cash subject to certain conditions.
China Security & Surveillance Technology Chairman and CEO Mr. Tu currently beneficially owns approximately 20.9% of NYSE: CSR's common stock. Chairman and CEO Mr. Tu said the offered $6.50 represents a premium of 58.5% to the Company's closing price on March 7, 2011.

Indeed shares of China Security & Surveillance Tech. Inc. (Public, NYSE:CSR) jumped in response to the buyout proposal from $4.04 on March 7 to $5.45 on March 8, 2011.

But the plaintiff alleges that the buyout is designed to soley benefit insiders while undervaluing China Security & Surveillance Tech.

In fact CSR shares traded as early as January 3rd at $5.50 per share, on Nov. 8 as high as $5.92, and in October 2010 as high as $6.31, leaving CSR stockholders with only a meager premium.

Stockholders of China Security & Surveillance Tech. Inc, that purchased CRS shares during April 2010, when CRS shares traded as high as $7.53, or purchased their CRS shares during March or January 2010, when CRS traded as high as $8.68 per share, would actually hand their CRS shares over at a discount.

Additional China Security & Surveillance Tech. Inc. has performed exceptionally well for its shareholders in the past. Its 12months Total Revenue went from $106.99million in 2006 to $580.87million in 2009. Its Net Income went from $22.93million in 2006 to $56.58million in 2009. For the first three quarters in 2010 China Security & Surveillance Tech. Inc. reported a combined nine months Total Revenue of $470.69million with a Net Income of $48.35million.