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Top Ships faces legal action over its Kalani dealings

Another Greek owner with links to controversial Kalani Investments has seen lawyers gear up for a fight.

American law firm Robbins Geller Rudman & Dowd, and at least two other law firms, have revealed that a class action has kicked off in New York on behalf of purchasers of Top Ships common stock during the period between January 17 this year through to August 22

The complaint charges the tanker owner’s CEO, Evangelos Pistiolis, engaged in a series of manipulative share issuance/sales transactions with Kalani through which Top Ships would sell its common shares and securities convertible into common shares to Kalani at a significant discount to market price and file registration statements so that Kalani could resell these shares into the market.

“When Kalani’s sales of Top Ships stock caused the price of Top Ships stock to decline, the Company would reverse split the stock, causing a certain number of outstanding shares to be merged into a single share, and thereby raise the price of Top Ships stock,” the law firm stated on Thursday, adding: “Then, Top Ships would again sell securities to Kalani and the same pattern of transactions would ensue. At the same time that Top Ships was engaging in these transactions, defendants failed to disclose the true purpose of the transactions and related stock issuances and reverses – to finance related-party transactions and acquisitions that primarily benefited Pistiolis and his related companies, and otherwise funnel money to Company insiders.”

Robbins Geller asserted that while Pistolis has enriched himself from all of these transactions, the Top Ships common stock has plummeted by more than 99%.

The news has many similarities with Kalani’s recent controversial dealings with George Economou’s DryShips, another New York-listed outfit where Kalani has come in with sizeable share purchases only for DryShips to repeatedly split its stocks.

Another Greek owner, Diana Containerships, also raised money this year by issuing new shares to Kalani. Kalani has repeatedly in the press been linked to a Canadian hedge fund manager named Marc Bistricer.

In another move likely to infuriate investors, Diana Containerships yesterday announced a reverse stock split of the company’s common shares, par value $0.01 per share, at a ratio of one-for-seven.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.
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