San Diego, Feb. 17, 2012 (Shareholders Foundation) -- The announcement by Jingwei International Limited that it intends to agree to the going private offer by its Chairman and CEO prompted an investigation for investors Jingwei International Limited (NASDAQ:JNGW) shares concerning whether the offer to acquire Jingwei IntlLtd and the acquisition process are unfair to investors in NASDAQ:JNGW shares.

The investigation by a law firm concerns whether Jingwei International Limited, certain officers and directors, and/or others breach their fiduciary duties owed to Jingwei International Limited (JNGW) investors in connection with the proposed acquisition.

On January 6, 2012, Jingwei International Limited (NASDAQ: JNGW) announced it has received a proposal from its Chairman and CEO for a 'going private' transaction designed to eliminate Jingwei's status as a public company in the U.S.
Under the proposed transaction the Chairman and CEO is proposing a reverse stock split transaction that would include a reverse split at a 1-for-50,000 share ratio followed by a cancellation of all fractional shares below one whole share at a per share price of $1.56 . To the extent necessary to finance the proposed transaction, he is willing to provide funding to Jingwei at a price of $1.56 per share to fund the cancellation of fractional shares following a reverse split in order to effect the going-private transaction, which would be financed solely through available personal funds.

Then on Jan. 12, 2012 Jingwei International Limited (NASDAQ: JNGW) announced that its Chief Financial Officer will resign from his position effective January 13, 2012.

Shares of Jingwei International Limited (NASDAQ:JNGW) jumped from $1.45 per share on Feb. 10, 2012 to $2.12 on February 16, 2012 after Jingwei International Limited announced its intent to accept a 'going private' proposal proposed by its Chairman and CEO, and cease its public company status.

Jingwei International Limited said that a special committee of its board of directors, comprised of independent directors, has recommended, and the board of directors has approved, plans to voluntarily delist the common shares from the NASDAQ. The Board is recommending a reverse stock split transaction that would include a reverse split at a 1-for-20,000 share ratio whereby each 20,000 outstanding shares of Jingwei common shares will be converted into one whole share and, in lieu of issuing fractional shares to shareholders owning less than 20,000 pre-reverse stock split shares, Jingwei will pay cash equal to $2.20 multiplied by the number of pre-reverse stock split shares held by such shareholder. Immediately following the reverse stock split, the Company will file a second amendment to its articles of incorporation to effect a 20,000-for-1 forward stock split. As a result, shareholders owning 20,000 or more common shares at the time of the reverse split will retain their current numbers of common shares without change and not receive cash in the transaction.

However, Jingwei stock traded as high as $2.59 per share as recently as July 25, 2011 and reported a book value of $2.98 per share for in one of its recent quarters.
Therefore the investigation for NASDAQ:JNGW investors concerns whether the Jingwei Intl. Board of Directors will undertake an adequate sales process and in particular breach their fiduciary duties to Jingwei International Ltd (NASDAQ:JNGW) shareholders by failing to adequately shop the Company before entering into this transaction especially given the fact that the Chairman and CEO Jingwei Intll Limited owns 41.1% of Jingwei's common shares. Furthermore Jingwei International Limited reported that its annual Revenue rose from $24.43million in 2007 to $37.64million in 2010 and its Net Income over the same time periods increased from $7.66milion in 07 to $9.88million. Thus a potential securities class action lawsuit would seek to maximize the amount of money and information NASDAQ:JNGW shareholders would receive in a buyout, so the law firm.