Stull, Stull & Brody Announces Class Action against Rhodia, S.A.

13 May 2005

Notice is hereby given that a class action lawsuit was filed on May 10, 2005 in the United States District Court for the District of New Jersey, against Rhodia S.A. ("Rhodia" or the "Company") (NYSE:RHA), on behalf of purchasers of Rhodia publicly traded securities between April 26, 2001 and March 23, 2004, inclusive (the "Class Period").

The complaint charges alleges that Rhodia violated federal securities laws by issuing false or misleading information. Specifically, defendants overstated Rhodia's financial results by failing to record impairment on a timely basis in order to: (1) protect their executive positions and compensation; (ii) raise EUR 1 billion in Notes in a private placement on May 28, 2003, as well as EUR 290 million in a private placement of Notes with American investors in 2001; and (iii) enhance the value of their personal Rhodia holdings. During the Class Period, defendants knew, but concealed that: (i) Rhodia's ChiRex unit was impaired and had not been written down in a timely fashion; (ii) Rhodia failed to write down deferred tax assets to recoverable values in 2002 and failed to do so until th end of 2003; (iii) Rhodia failed to properly report its outstanding debt; and (iv) Rhodia failed to include disclosures necessary for investors to understand the trends in its business.

On March 23, 2004, it was revealed that French securities regulators were conducting an inquiry into Rhodia's financial reporting. On this news, Rhodia fell to $1.50 per share. Subsequently, it was reported that France's stock market regulator had found that Rhodia had failed to disclose important information in a timely fashion beginning in 2001.

If you purchased Rhodia securities between April 26, 2001 and March 23, 2004, inclusive, you may, no later than June 6, 2005, request the Court appoint you as lead plaintiff. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Stull, Stull & Brody, or other counsel of your choice, to serve as your counsel in this action. Stull, Stull & Brody has litigated many class actions for violations of securities laws in federal courts over the past 30 years and has obtained court approval of substantial settlements on numerous occasions. Stull, Stull & Brody maintains offices in both New York and Los Angeles.

Source: Business Wire

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