Alan G. Stevens, et al. v. Sembcorp Utilities Pte Ltd., …securities.stanford.edu/.../2010720_f01c_10CV04481.pdfCase 1:10-cv-04481-SHS Document 14 Filed 07/20/10 Page 1 of 32 UNITED

Case 1:10-cv-04481-SHS Document 14 Filed 07/20/10 Page 1 of 32

UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF NEW YORK

xALAN G. STEVENS, Individually and on Civil Action No. 1: 1 0-cv-04481Behalf of All Others Similarly Situated,

CLASS ACTIONPlaintiff,

AMENDED COMPLAINT FORVS. VIOLATION OF § 14(e) OF THE

SEMBCORP UTILITIES PTE LTD., SECURITIES EXCHANGE ACT OF 1934

Defendant.

x DEMAND FOR JURY TRIAL

572241_2

JUL 19


Plaintiff Alan G. Stevens for his Amended Complaint against defendant Sembcorp Utilities

Pte Ltd. ("Sembcorp") alleges as follows:

INTRODUCTION

1. This is a stockholder class action brought on behalf of the holders of the common

stock of Cascal N.V. ("Cascal" or the "Company") against Sembcorp arising out of its violations of

§ 14(e) of the Securities Exchange Act of 1934 ("Exchange Act"), 15 U.S.C. §78n(e), in connection

with Sembcorp's tender offer to acquire all of the issued and outstanding shares of Cascal ("Tender

Offer").

2. On or about May 21, 2010, Sembcorp filed a Schedule TO Tender Offer Statement

and Offer to Purchase ("Offer to Purchase") with the Securities and Exchange Commission ("SEC")

(together with any amendments and supplements thereto, the "Schedule TO"). Sembcorp made

numerous material misstatements and/or omissions in the Schedule TO to ensure that Cascal

shareholders would not resist Sembcorp's Tender Offer.

3. Sembcorp needed the Company's shareholders to tender approximately 36% of the

issued and outstanding shares of Cascal in order to squeeze out the remaining shareholders under

Dutch Civil Code. If 36% of the shares were not tendered and Cascal's shareholders resisted

Sembcorp's Tender Offer, Sembcorp would necessarily have to pay more money to be successful in

its attempt to acquire Cascal.

4. By using a Schedule TO that misrepresented and/or omitted material information

regarding the Tender Offer, Sembcorp was able to acquire shares of Cascal at a lowball price. By

giving Cascal shareholders a false impression that the terms of the Tender Offer were developed

pursuant to a robust and fair process, Sembcorp induced the Company's shareholders to tender their

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shares at a price that deprived the Company's shareholders of the full value of their interests in

Cascal.

5. On July 9, the initial Tender Offer period expired and Sembcorp obtained 92.26% of

the Company's shares. A subsequent offering for Cascal to divest their remaining shares will expire

on July 30, 2010.

6. Plaintiff and the Company's stockholders suffered substantial harm as a result of

Sembcorp's preparation and dissemination of the false and misleading Schedule TO in violation of

federal law.

JURISDICTION AND VENUE

7. This Court has jurisdiction over this action pursuant to §27 of the Exchange Act, 15

U.S.C. §78aa , and 28 U.S.C. § 1331. The claims asserted herein arise under § 14(e) of the Exchange

Act, 15 U.S.C. §78n(e).

8. Venue is properly laid in this judicial district because the acts and transactions

constituting the violations of federal law complained of herein have occurred in this District,

including the dissemination of the Schedule TO to residents of New York through the means and

instrumentalities of interstate commerce and the mails.

PARTIES

9. Plaintiff Alan G. Stevens was an owner of shares of common stock of Cascal during

the Relevant Period.'

10. Defendant Sembcorp is a private company limited by shares, incorporated under the

laws of Singapore and a wholly owned subsidiary of Sembcorp Industries Ltd., a public company

' The relevant time period for this action is March 21, 2010 through July 9, 2010 (the"Relevant Period").

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limited by shares, incorporated under the laws of Singapore and listed on the main board of the

Singapore Exchange.

CLASS ACTION ALLEGATIONS

11. Plaintiff brings this action individually on his own behalf and as a class action on

behalf of all persons who held.shares of Cascal common stock (except Biwater Investments Ltd.

(`Biwater"), and any defendant herein, any person, firm, trust, corporation or other entity in which

Biwater and/or defendant has a controlling interest, the officers and directors of any such entities,

and the legal representatives or assigns of any such excluded party) and tendered or otherwise

exchanged their shares pursuant to the Schedule TO during the Relevant Period, and their successors

in interest, who are being and will be harmed by defendant's actions described below.

12. This action is properly maintained as a class action under Fed. R. Civ. P. 23(b)(1) and

23(b)(2).

13. The class is so numerous that joinder of all members is impracticable. As of

December 31, 2009, there were 30,581,343 shares of common stock issued and outstanding.

14. A class action is superior to other methods for the fair and efficient adjudication of

the claims herein asserted, and no unusual difficulties are likely to be encountered in the

management of this action as a class action.

15. There are common questions of law and fact affecting the members of the class.

Among the questions of law and fact common to the class which predominate over questions

affecting individual class members are, inter alia, the following:

(a) Whether the federal securities laws have been violated by defendant's acts as

alleged herein;

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(b) Whether the Schedule TO for the transaction at issue here contains material

misrepresentations or omissions; and

(c) Whether plaintiff and the members of the class have been damaged and what

is the proper measure of damages.

16. Plaintiff's claims are typical of the claims of the class because the harm suffered and

will be suffered by plaintiff and the other class members was caused by the same false and

misleading statements made by defendant. Plaintiff does not have interests antagonistic to or in

conflict with the class.

17. Plaintiff will fairly and adequately protect the interests of the class. He has retained

competent counsel experienced in class action litigation under the federal securities laws to further

ensure such protection and intends to prosecute this action vigorously.

18. Class certification would be appropriate here under Fed. R. Civ. P. 23(b)(1) because

the inconsistency of varying adjudications would establish incompatible standards of conduct for the

defendant and/or would substantially impede the ability of other members of the class to protect their

interests in this matter.

SUBSTANTIVE ALLEGATIONS

Background Leading up to the Announcement of the Tender Offer

19. Cascal, formed in April 2000, is a New York Stock Exchange ("NYSE") listed

company that is the leading provider of water and wastewater services to customers in eight

countries. Ina typical water project, the Company collects raw water from surface and groundwater

sources, treats the water to meet the required standards, and then supplies the treated water through a

distribution network to its customers' premises. Ina typical wastewater project, Cascal collects the

wastewater from its customers' premises, treats the wastewater to meet the required standards, and

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returns the treated water to the environment. The Company provides these services under long-term

contracts or licenses that typically give it the right to provide its services within a defined territory.

Cascal's customers are predominantly homes and businesses representing a total population of

approximately 4.3 million.

20. While other companies have suffered during the recent global financial crisis, Cascal

has performed extraordinary well. In August 2009, Adrian White ("White"), the Chairman of the

Board of Directors of Cascal (the "Board") at that time observed: "Cascal's management team has

executed admirably within the context of the most challenging economic environment in recent

history."

21. White continued: "Cascal is ideally positioned to grow having substantially met all

major targets, added attractive new businesses in China, Chile and South Africa and virtually tripled

EBITDA in non-UK segments over the last three fiscal years. With continued planning, quality

execution and strong governance, particularly with increased emphasis on business development, I

am confident the Company will continue to deliver profitable growth and steady returns for our

shareholders."

22. White's observations proved accurate. By way of example, on February 10, 2010,

Cascal announced impressive financial results for the nine months and the quarter ended December

31, 2009, stating in relevant part:

Revenue for the nine months ended December 31, 2009 increased by $13.9 millionor 11.7% at constant exchange rates, compared to the same period last year. Of thisincrease, $5.5 million was contributed by acquisitions, with the remaining $8.4million contributed by the pre-existing portfolio through a combination of rateincreases, additional customers and higher volumes.

23. Commenting on the Company's results, Stephane Richer, Cascal's former Chief

Executive Officer ("CEO"), stated: "Cascal continues to execute successfully on its growth agenda

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as evidenced by our continued ability to deliver double-digit year-over-year revenue growth at

constant exchange rates through a combination of organic growth and strategic acquisitions. In

addition to solid revenue growth, our EBITDA margin has remained strong at around 35%, and our

cash flow generation has improved. We are very pleased to have recently bolstered our portfolio

with the addition of desalination operations on the islands of Antigua, Curacao and Bonaire."

24. Richer continued: "We are also pleased to have successfully collected the outstanding

balance of approximately $7 million owed to us by the Panamanian state-owned water authority and

look forward to continuing to deliver high quality water to the more than 300,000 people in that

region."

25. Cascal's growth has seen no limit and demand for Cascal's services has only been

increasing. On June 16, 2010, Cascal announced stellar financial results for the year end and the

fourth quarter ended March 31, 2010, including the following:

• Cascal's fiscal fourth-quarter profit more than quintupled as new acquisitions revved up

sales;

• Revenue climbed 29 percent to $48.9 million;

• The Company earned $4.6 million up from $800,000 in the three months ended in March

over a year ago;

• Over the entire year, revenue from China, one of eight countries that the Company

operates in, jumped 50 percent — a revenue increase of $10.5 million;

• Over the entire year, revenue from Chile, one of eight countries that the Company

operates in, jumped 31 percent — a revenue increase of $3.6 million;

• For the full year, Cascal made a profit of 23.5 million up 32 percent from $17.8 million,

or 58 cents per share, the year before; and

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• Full-year revenue climbed 11 percent to $181.8 million.

26. Unfortunately, any opportunity to share in Cascal's profits have been taken away

from plaintiff and the class of Cascal shareholders. Sembcorp has been able to pluck the Company

from them at a lowball price through a series of intricate and expert moves — the details which are

still veiled to plaintiff and the class of Cascal shareholders — starting with the manipulation of the

vulnerable former majority shareholder of Cascal, Biwater.

27. Up until January 2008, Biwater, a limited company existing under the laws of

England & Wales, was the sole shareholder of Cascal. In January 2008, Biwater completed an initial

public offering of Cascal's shares (the "IPO"), with the assistance of Credit Suisse as co-lead

underwriter. After the IPO, Biwater became the majority shareholder of Cascal, holding

approximately 58.5% or 17,868,543 shares of the Company's common stock issued and outstanding.

28. Biwater, however, began to find itself in serious financial difficulty. Biwater

Holdings Limited ("BHL"), the ultimate parent company of Biwater, and its subsidiaries reported

losses of approximately $39.1 million for the year ended March 31, 2009. Also as of March 31,

2009, BHL had net liabilities of approximately $13.2 million.

29. Martyn Everett ("Everett"), a director of Biwater, explained:

The Group's [referring to BHL and its subsidiaries] financial position has beenweakened by not only the global economic conditions but also by a loss arising on along-term contract entered into by Biwater's wholly owned subsidiary, BiwaterInternational Limited, in Panama on May 4, 2007. The project to be performedpursuant to the Panama Contract ran into a number of operational and commercialdifficulties (including the insolvency of the main subcontractor to the project) and, asof March 31, 2009, the Group's forecasted pre-tax losses resulting directly from thePanama Contract were approximately £15.3 million (approximately US $22.2million).

30. Everett continued:

Biwater has determined that the sale of the Cascal shares owned by BiwaterInvestments Limited is the only way to raise the necessary funds required to remedy

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its current financial difficulties, repay all (or substantially all) of its on-demandindebtedness and finance its obligations [], with a view to assuring the futureviability of the Group. It is my understanding that in 2008, Biwater retained HSBCBank plc (HSBC), in its capacity as financial advisers to assist in the sale of itsshares for the best possible price.

31. Like Everett said above, in or around July 2008, Biwater began to explore a sale of its

58.5% stake in Cascal (the "Biwater Stake"). HSBC Bank plc ("HSBC"), referred above, served as

Biwater's financial advisor in this regard. HSBC was also Biwater's main lender.

32. At this time, Sembcorp emerged as an interested potential buyer. Sembcorp

submitted a non-binding offer to purchase the Biwater Stake for $10.65 per share. When the sales

process proceeded to the second stage, Biwater did not invite Sembcorp to participate. Sembcorp

has not disclosed the content of any discussions between Sembcorp and Biwater regarding Biwater's

reasons for not inviting Sembcorp to the second stage, and/or any discussions regarding the $10.65

price offered by Sembeorp.

33. Biwater was not successful in selling its Biwater Stake at this time. In or around

September 2009, pressured by HSBC, Biwater renewed its efforts to sell the Biwater Stake.

34. In or around September 2009, Biwater contacted Sembcorp to inform Sembcorp that

Biwater was reinitiating the sales process of the Biwater Stake. Sembcorp indicated it was still

interested. Biwater, in response, sent Sembcorp a draft purchase agreement. Sembcorp has not

disclosed the content of the draft purchase agreement, including whether the agreement contained

any price terms.

35. On October 12, 2009, Sembcorp submitted a non-binding offer to purchase the

Biwater Stake at $6.25 to $7.00 per share. HSBC informed Sembcorp that it was invited to the next

stage of the sale process. Sembcorp did not disclose any additional details concerning its invitation,

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including any discussions between Sembcorp and Biwater regarding the price range offered by

Sembcorp.

36. Notably, Sembcorp's offer for the Biwater Stake at the $6.25 to $7.00 per share price

reflected an expected "block discount" for Biwater's inability to sell its block of shares into the

market. When a block of stock is sufficiently large to overwhelm ordinary trading activity, it will

take a long period to sell and/or will change hands at a discount to the prevailing market price of

smaller holdings. This "block discount" reflects the lack of liquidity inherent in a block of shares

large enough that few (if any) buyers are readily available. This discount might be deemed

appropriate to compensate for either the depressive effect of "dumping" a large block of shares into

the market or for the time value of not having the use of the proceeds of the sale at the valuation

date. Not only did Sembcorp's offer for the Biwater Stake at the $6.25 to $7.00 per share price

reflect a "block discount," it also necessarily included further price depression by Biwater's

desperation to sell.

37. Sembcorp retained Credit Suisse, which had previously underwritten the IPO for

Cascal, as its financial advisor in its endeavor. Sembcorp did not disclose any additional details

concerning its engagement of Credit Suisse, including whether Sembcorp and Credit Suisse

discussed Credit Suisse's previous relationship with Cascal.

38. At some point, Sembcorp became interested in an acquisition of the entire Company,

not just the Biwater Stake. Sembcorp has not disclosed any additional details regarding its change in

interest, including: (i) when Sembcorp decided to pursue an acquisition of the entire Company

versus the Biwater Stake; (ii) whether Sembcorp by itself decided it was interested in an acquisition

of Cascal or whether an acquisition of the entire Company was first suggested by Biwater, Credit

Suisse, and/or HSBC; (iii) the discussions Sembcorp had internally or with Biwater, Credit Suisse,

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HSBC regarding the advantage of pursuing an acquisition of the entire Company rather than the

Biwater Stake; (iv) the discussions Sembcorp had internally or with Biwater, Credit Suisse, HSBC

regarding the consequences and/or reactions by Cascal with respect to Sembcorp's decision to

pursue an acquisition of the entire Company; and (v) the analysis conducted by Sembcorp with

respect to any change to its October 12, 2009 $6.25 to $7.00 per share offer of the Biwater Stake

considering its decision to pursue an acquisition of the entire Company.

39. On or around October 15, 2009, Biwater asked Cascal permission to make the

Company's nonpublic information available to Sembcorp as a potential buyer of the Biwater Stake.

Cascal gave Biwater permission conditioned on the execution of a confidentiality agreement.

40. Cascal entered into a letter agreement dated November 9, 2009 (the "Letter

Agreement") with Biwater permitting Biwater to disclose Cascal's confidential information

according to the use and disclosure addressed therein.

41. On or around November 9, 2009, Biwater and Sembcorp entered into a non-

disclosure agreement ("NDA"). Biwater began to share nonpublic Company information with

Sembcorp.

42. On December 14, 2009, Sembcorp submitted a conditional offer to HSBC and

Biwater offering $6.50 to $7.00 for all the issued and outstanding shares of Cascal. Notably, the

price Sembcorp offered for all the shares of Cascal was the same as the price offered for the Biwater

Stake, demonstrating that the price Sembcorp offered for all the shares of Cascal included the "block

discount" discussed above. Sembcorp has not disclosed: (i) why Sembcorp made an offer for Cascal

to HSBC and Biwater instead of approaching Caseal's Board or management; (ii) whether Sembcorp

decided to approach Biwater instead of Cascal, or whether it was suggested by Biwater, HSBC or

Credit Suisse; (iv) any discussions internally or with Biwater, HSBC or Credit Suisse regarding

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acquiring the entire Company versus the Biwater Stake; (v) the analysis conducted by Sembcorp

with respect to the price range; and (vi) any discussions between Sembcorp Biwater, HSBC or Credit

Suisse with respect to the price range.

43. Biwater promptly agreed to grant Sembcorp exclusive negotiations until January 31,

2010 and agreed to assist Sembcorp in determining the best way to procure a recommendation from

Cascal's Board. Sembcorp has not disclosed: (i) why Sembcorp sought exclusivity and assistance

from Biwater instead of approaching the Cascal Board and/or management directly; (ii) the

discussions between Sembcorp and Biwater, HSBC, and/or Credit Suisse leading up to Biwater's

agreement to grant exclusivity, including discussions regarding any alternate suitors for Cascal; (iii)

any discussions regarding the potential and actual conflict of interest faced by Biwater and/or any of

its representatives in assisting Sembcorp, including any discussions regarding Biwater's duty to

Cascal's shareholders under the applicable law; and (iv) what information was provided to Sembcorp

by Biwater and/or its representatives with respect to approaching Cascal's Board.

44. In or around February 2010, Sembcorp obtained an agreement from Biwater to extend

the exclusivity period to March 7, 2010 (the "February Exclusivity Letter") and to continue

providing assistance to Sembcorp in obtaining a recommendation from Cascal's Board.

45. In the February Exclusivity Letter, Biwater also agreed to pay a fee of $1 million to

Sembcorp if within two weeks after Sembcorp made a firm offer on terms set forth in the exclusivity

letter for all of the issued and outstanding shares of Cascal, Biwater did not enter into a binding

agreement with Sembcorp in which Biwater would irrevocably tender its Biwater Stake. Sembcorp

has not disclosed: (i) the terms were set forth in the February Exclusivity Letter, including whether

Sembcorp had to make a firm offer at a specific price and any discussions regarding the specific

price; (ii) any discussions leading up to the agreement to a termination fee, including whether the

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idea of the termination fee originated from Sembcorp, Biwater, or their advisors; (iii) any

discussions as to purpose of the termination fee; (iv) any discussions as to any alternatives to a

termination fee; (v) any discussions and/or analysis as to the specific amount of the termination fee;

(vi) any discussions regarding the timeline proposed by any of the parties for a firm offer; and (vii)

any discussions regarding the circumstances under which Biwater might refuse to enter into a

binding agreement to irrevocably tender its Biwater stake with Sembcorp.

46. Sembcorp also obtained an agreement from Larry Magor ("Magor") and White — who

were Cascal directors at that time — to support Sembcorp's offer.

47. While Sembcorp did not disclose how it was able to obtain Magor's support in the

Offer to Purchase, in the Amendment No. 4 to the Schedule TO-T filed on June 7, 2010

("Amendment"), Sembcorp later disclosed Magor's relationship with Biwater. Specifically, Magor

was the CEO of Biwater and the main Biwater representative that Sembcorp was negotiating with.

Sembcorp has not disclosed: (i) any discussions between Sembcorp and Magor (or any other party)

regarding the potential and actual conflict of interest faced by Magor, including any discussions

regarding Magor's duty to Cascal's shareholders under the applicable law; (iii) any discussions

between Sembcorp and Magor (and any other party) regarding Magor's personal financial

circumstances in light of Biwater's financial distress and its effect on Magor's decision to support

Sembcorp; and (iv) whether Magor provided Sembeorp any information about Cascal that Magor

possessed as a director of Cascal.

48. Sembcorp has not disclosed the relationship between White and Biwater. Cascal,

however, later stated that it believed that White, his family and family interests owned

approximately 70% of the issued and outstanding capital stock of BHL, the parent company of

Biwater. Sembcorp has not disclosed: (i) whether Sembcorp promised White a continuing role in the

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post-merger company, or any other benefits, for his support; (ii) any discussions between Sembcorp

and White (and any other party) regarding White's conflicting statement six months ago that he was

"confident the Company will continue to deliver profitable growth and steady returns for our

shareholders"; (iii) any discussions between Sembcorp and White (or any other party) regarding the

potential and actual conflict of interest faced by White, including any discussions regarding White's

duty to Cascal's shareholders under the applicable law; (iv) any discussions between Sembcorp and

White (and any other party) regarding White's personal financial circumstances in light of Biwater's

financial distress and its effect on White's decision to support Sembcorp; and (iv) whether White

provided Sembcorp any information about Cascal that White possessed as a Chairman of Cascal.

49. On March 1, 2010, Sembeorp finally met with Cascal's Board and informed it that

Sembcorp was interested, not in purchasing the Biwater Stake, but in making a tender offer to

acquire all of the Company's issued and outstanding shares at a price somewhere in the range of

$6.50 to $7.00 per share. Sembcorp's offer price continued to include the "block discount"

discussed above.

50. The Board (via Special Committee) declined to consider Sembcorp's offer.

51. Thereafter, Sembcorp conferred with Biwater and HSBC and they advised Sembcorp

to propose a fixed offer price instead of a range of per share offer prices. Sembcorp has not

disclosed whether Biwater and HSBC advised Sembeorp to propose a specific price within the range

and any discussion between Sembcorp, Biwater and their advisors of specific prices, including prices

higher than $6.75.

52. On March 7, 2010, Sembcorp submitted a letter to the Board containing its firm offer

to make a tender offer to acquire all of Cascal's issued and outstanding shares at $6.75 per share.

Sembeorp's offer was conditioned on, among other things, a minimum condition of 80% of the

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issued and outstanding shares of Cascal validly tendered and not withdrawn. Sembcorp has not

disclosed: (i) the discussions leading up to Sembcorp's decision to propose the 80% condition,

including whether the proposal originated from internal discussions, Biwater, and/or their financial

advisors; (ii) any discussions regarding alternatives to the 80% condition; and (iii) any discussions

regarding the relationship between the 80% condition and price.

53. An independent committee of the Company's Board determined that Sembcorp's

offer was inadequate and informed Sembcorp that the committee could not make a favorable

recommendation to the Board.

54. Sembcorp, Biwater, and their respective financial advisors continued to discuss the

terms of a potential tender offer for Cascal, including price and structure. Biwater agreed to extend

the exclusivity period for Sembcorp three more times.

55. At some point, Sembcorp, Biwater, and their respective financial advisors began

discussing a potential two tiered pricing structure of $6.75 if 80% or more of Cascal shares were

tendered in the tender offer, and $6.40 per share if less than 80% were tendered.

56. While in the Offer to Purchase, Sembeorp did not disclose any details on how the

parties arrived at the two-tiered price structure, in the Amendment, Sembcorp later disclosed that

Biwater did not want the 80% condition because, consistent with its "need" to sell its Biwater Stake,

it wanted greater certainty that the tender offer be completed. Sembcorp countered that the if the

80% condition were dropped, it would lower the tender offer price. Sembcorp and Biwater

discussed having a structure by which: (i) if 80% was reached, shareholders would get $6.75 and

there would be a subsequent period of at least ten days of $6.75; (ii) if 80% was not reached, there

would be a subsequent period of at least ten days of $6.40, and if the 80% was reached in that

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subsequent period, Sembcorp would extend the subsequent offering period of at least ten days of

$6.75.

57. When Sembcorp asked the SEC Staff about the structure, however, the SEC Staff

indicated that it was not prepared to do provide a no-action or exemptive relief to such a structure.

58. Sembcorp and Biwater then discussed an alternate structure where the first offer price

was $6.75 per share, subject to the 80% condition, if the 80% condition was not reached at the

expiration of the offer, the offer price would be decreased to $6.40 per Share and the offer would be

extended an additional ten business days. Sembcorp has not disclosed any discussions between

Sembcorp, Biwater and its advisors regarding this alternate structure, including any discussions

regarding whether and why this alternate structure met any concerns of the SEC Staff.

The Announcement of the Tender Offer

59. On or about April 26, 2010, Sembcorp filed with the SEC a Schedule 13D (the

"Schedule 13D") in which it announced that it would be making a tender offer for all of Cascal's

shares within 20 days.

60. Sembcorp confirmed that the Tender Offer was a two-tiered offer, providing for an

offer price of $6.75 per share in the event that 80% of Cascal's issued and outstanding shares being

validly tendered (the "80% Condition") and an offer price of $6.40 per share in the event the 80%

Condition is not met but Biwater's shares were tendered.

61. Sembcorp stated that if more than 95% tendered, than it would squeeze out the

remaining shares under Dutch Civil Code. Under Dutch Civil Code, these minority shareholders

would not be entitled to appraisal rights.

62. If less than 95% tendered, Sembcorp stated that it would seek to acquire more shares,

implement restructuring measures, take steps to delist the Companhy from the NYSE and/or

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deregister the Company under the Exchange Act and suspend the Company's reporting obligation

with the SEC.

63. At the same time it announced the Tender Offer, Sembcorp announced that it had

entered into an agreement with Biwater on April 25, 2010, pursuant to which Biwater agreed to

tender and not withdraw its 58.5% ownership of Cascal's stock to Sembcorp, vote against any

competing transaction, and not to solicit, negotiate or enter into any competing transaction

("Stockholder Support Agreement").

64. Taking all the above into consideration, the Tender Offer presented the following

possible outcomes for the Company's shareholders:

• if 36% and more tender, then the tendering shareholders receive $6.75 and

shareholders that do not will be squeezed out via Dutch Code;

• if between 11.5% and 36% tender, then the tendering shareholders receive $6.75

and shareholders that do not will risk holding on to their shares in an

environment that nearly guarantees that the shares would be devalued (e.g.,

Sembcorp controls the Company and the Board, subjects the Company to

delisting, deregistering, otherwise terminating a market for the shares, and

eliminating information available);

• if less than 11.5% tender, then the shareholders have an opportunity to receive

$6.40 in the subsequent period, and/or hold on to their shares.

65. Thus, the Tender Offer was structured in a way to incentivize Cascal's shareholders

to rush to sell their stock or else, face the consequences of having their shares devalued.

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66. At best the Company's shareholders would receive $6.75 for their shares. The

closing price on April 23, 2010, the last trading day prior to the parties agreeing on the Tender Offer

and executing the Stockholder Support Agreement, of Cascal's shares was $7.61.

The Cascal Litigation

67. On April 30, 2010, Cascal commenced litigation against Sembcorp and Biwater in the

United States District Court for the Southern District of New York (the "Cascal Litigation") based

on Sembcorp's and Biwater's actions in connection with Letter Agreement and the NDA.

68. Specifically, Cascal alleged that Sembcorp breached the NDA by using Cascal's

confidential information beyond the agreed-to scope. Cascal also alleged that Sembcorp violated or

will violate federal securities law because its announcement of the Tender Offer and its intent to

commence it while in possession of material nonpublic information amounted to "trading" or

"purchas[ing] or sell[ing]" on the basis of insider information.

69. Cascal alleged that Biwater breached the Letter Agreement by permitting Sembcorp

to breach the terms of the NDA. Cascal additionally alleged that Biwater aided and abetted

Sembcorp's violations of federal securities law.

70. On May 19, 2010, the United States District Court for the Southern District of New

York denied Cascal's motion for preliminary injunction.

71. In the Offer to Purchase, Sembcorp stated that the court "cleared the way for the

Offer to go forward."

72. Cascal issued the following statement: "Although we are disappointed, the court's

ruling presents us with an opportunity to potentially challenge the offer once it has been official

declared. We are also heartened the court acknowledged that shareholders may have their own legal

remedy."

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73. On May 25, 2010, Cascal voluntarily withdrew its complaint against Sembcorp,

without prejudice.

The Stevens Litigation

74. On May 21, 2010, Sembcorp filed its Offer to Purchase containing the terms of the

Tender Offer and the Stockholder Support Agreement and commenced the Tender Offer. Biwater

tendered all of its 58.4% shares pursuant to the Stockholder Support Agreement.

75. On June 9, 2010, plaintiff filed this litigation against Sembcorp, alleging that

Sembcorp failed to disclose material information in connection with its Tender Offer in violation of

federal securities § 14(e) of the Exchange Act.

76. Subsequently, plaintiff filed a motion for a temporary restraining order seeking to

prevent Sembcorp from proceeding with the Tender Offer until Sembcorp cured its disclosures.

Principally, plaintiff argued that Sembcorp failed to disclose material financial information about the

Company.

77. Sembcorp opposed plaintiff's motion and filed certain documents in support of its

opposition. Among other things, the documents contained an Exhibit 8 to the declaration of one of

Sembcorp's attorneys, Anthony M. Candido, which was entitled "Project Atlantis November 2009."

This document contained confidential financial and other information about Cascal that was

provided to Sembcorp by Biwater, and which had not previously been made public. Specifically, the

document contained detailed financial projections for all segments of Cascal's business, as well as a

detailed discussion of those segments.

78. Sembcorp informed plaintiff that it would be releasing this information to the

Company's shareholders and that it would be extending the expiration of the initial tender offer

period. As a result, plaintiff agreed to temporarily withdraw his motion for preliminary injunction,

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while reserving his rights to re-file the motion pending review of these materials and further

developments.

79. On or around June 21, 2010, Sembcorp filed an amendment to its tender offer

materials that contained the above material information.

The Tender Offer

80. Sembcorp extended the initial Tender Offer period, originally set to expire on June

21, 2010, to July 8, 2010.

81. On June 24, 2010, Cascal announced an Extraordinary General Meeting ("EGM").

Biwater had requested the EGM, and Cascal was required to hold it under Dutch law. Biwater

proposed for the EGM, the appointment of several directors, including: Tang Kin Fei, the President

and CEO of Sembeorp; Tan Cheng Guan, the Executive Vice President of Sembeorp, David Guy, a

Senior Vice President of Sembcorp, Richard Quek, a Senior Vice President of Sembcorp. The EGM

was held on July 9, 2010 and Tang Kin Fei, Tan Cheng Guan, David Guy and Richard Quek were

elected as non-executive directors.

82. On July 9, 2010, Sembcorp announced that a total of 28,398,090 shares were validly

tendered and not withdrawn, representing approximately 92.26% of the issued and outstanding

shares.

83.. Sembcorp announced that it now intended to: (1) delist the Shares from the NYSE;

(2) suspend Cascal's obligation to file reports under the "Exchange Act, pending termination of

registration of the Shares under the Exchange Act; and (3) terminate the registration of the

Company's shares under the Exchange Act.

-19-572241_2


CLAIM FOR RELIEF

For Violation of §14(e) of the Exchange Act Against Defendant

84. Plaintiff repeats and realleges 111 -83 as if fully set forth herein.

85. Section 14(e) of the Exchange Act provides that it is unlawful "for any person to

make any untrue statement of a material fact or omit to state any material fact necessary in order to

make the statements made, in light of the circumstances in which they are made, not misleading ...

in connection with any tender offer."

86. As discussed above, Sembcorp filed material financial information that was

previously omitted in response to plaintiff's litigation efforts.

87. . However, the Schedule TO still contains numerous material omissions and

misstatements as set forth below.

The Initial Rejection and Re-invitation of Sembcorp

88. Page 27 of the Offer to Purchase provides:

On September 15, 2008, Sembcorp submitted to HSBC Advisory anindicative non-binding offer to purchase Biwater's Shares at US$10.65 per Share....

On September 24, 2008, HSBC Advisory verbally informed Sembcorp that itwas not selected to participate in the second stage of the sale process.


On September 1, 2009, HSBC Advisory contacted Sembcorp to inform it thatBiwater was re-initiating the previously postponed sale process to sell its Shares andto see if Sembcorp was interested in participating in the process.

On October 12, 2009, Sembcorp submitted an indicative non-binding offer(the "Non-Binding Offer") to HSBC Advisory and Biwater. The Non-Binding Offerindicated that Sembcorp would be interested in acquiring Biwater's Shares at a pricerange of US$6.25 to US$7.00 per Share.


-20-572241_2


On November 10, 2009, Sembcorp received a sale process letter from HSBCAdvisory, requesting that Sembcorp's final and binding offer be submitted byDecember 14, 2009. The process letter indicated that Sembcorp would be providedan opportunity to meet with, and ask questions of, selected members of theCompany's management. A draft of the purchase agreement relating to thetransaction was also provided.

On December 23, 2009, Sembcorp received a letter from HSBC Advisoryconfirming that Biwater was prepared to grant Sembcorp exclusivity untilJanuary 31, 2010.

91. In order to render the foregoing not misleading, Sembcorp should have expressly

disclosed, at a minimum, (i) the reason provided to Sembcorp why Sembeorp was not a viable

candidate in comparison to other candidates in 2008; (ii) whether Biwater informed Sembeorp that it

considered the $10.65 price inadequate; (iii) whether Biwater, when re-inviting Sembcorp and

providing it a purchase agreement, informed Sembeorp of a specific price it was willing to do a deal

at; and (iv) that Sembcorp was informed that Biwater was in financial distress.

92. The omissions above rendered the Schedule TO materially misleading because absent

disclosure of the information, Cascal shareholders were misled into believing that (i) the $6.50 to

$7.50 price range proposed by Sembcorp was the result of Sembcorp's fair and independent analysis;

and (ii) Sembeorp had no knowledge of why it was granted exclusivity by Biwater when it was

previously rejected, including no knowledge of Biwater's desperation to sell.

Sembcorp's Change in Interest in Purchasing the Biwater Stake to Purchasing the EntireCompany


On October 12, 2009, Sembcorp submitted an indicative non-binding offer(the "Non-Binding Offer") to HSBC Advisory and Biwater. The Non-Binding Offerindicated that Sembcorp would be interested in acquiring Biwater's Shares at a pricerange of US$6.25 to US$7.00 per Share.


-21-572241_2


On December 14, 2009, Sembcorp submitted a conditional offer (the"Conditional Offer") to HSBC Advisory and Biwater. The Conditional Offerindicated an offer price of US$6.50 to US$7.00 per Share for the potentialacquisition of all of the issued and outstanding Shares.


The purpose of the Offer is to enable Purchaser to acquire control of the Companyeither through the acquisition of all of the issued and outstanding Shares, or, if fewerthan all of the issued and outstanding Shares are validly tendered and not properlywithdrawn prior to the Expiration Date, such lesser number of Shares as are validlytendered and not properly withdrawn, subject to the conditions of the Offer describedin Section 13 of this Offer to Purchase. The purpose of the Offer is also to provide anopportunity for the minority investors in the Company to sell their Shares at the sameprice as the Stockholder.


disclosed, at a minimum, (i) when between October 12 and December 14, Sembcorp decided to

pursue an offer for the entire Company; (ii) how this decision came about, and whether it was a

result of any influence from Biwater, Credit Suisse, and/or HSBC; and (iv) information regarding its

decision to offer $6.25 to $7.00 for the Biwater Stake and $6.50 to $7.00 for the entire Company.


disclosure of the information, Cascal shareholders were misled into believing: (i) that the Tender

Offer was in their interests by giving them an "opportunity" to sell at the same price as Biwater

when Cascal's shareholders were disadvantaged by Sembcorp including the "discount block" and

any further discount based on Biwater's desperation to sell in the Tender Offer price; and (ii) that the

Tender Offer was the result of Sembcorp's independent strategy to acquire control of the Company

and not the result of Sembcorp's strategy to take advantage of Biwater's financial situation to buy

the Company on the cheap.

Sembcorp Lock Up of Biwater


-22-572241_2


On December 14, 2009, Sembcorp submitted a conditional offer (the"Conditional Offer") to HSBC Advisory and Biwater. The Conditional Offerindicated an offer price of US$6.50 to US$7.00 per Share for the potentialacquisition of all of the issued and outstanding Shares.

On December 23, 2009, Sembcorp received a letter from HSBC Advisoryconfirming that Biwater was prepared to grant Sembeorp exclusivity untilJanuary 31, 2010, was willing to assist Purchaser in completing its remaining duediligence and was willing to work together with Sembcorp to determine a suitableapproach in order to procure a recommendation from the Company's board ofdirectors.

On February 3, 2010, Biwater and Sembcorp signed an exclusivity letter (the"February 3 Exclusivity Letter"), granting Sembcorp exclusivity until March 7, 2010(the "Exclusivity Period"), and providing for a break-fee of US$ 1,000,000 payableby Biwater in the event that (i) Sembcorp submitted a firm offer, on terms andconditions set forth in the exclusivity letter, before the end of the Exclusivity Periodand (ii) within two weeks from Biwater's receipt of the firm offer, Biwater did notaccept the firm offer by entering into or offering to enter into a binding agreementwith Sembeorp in which Biwater would irrevocably undertake to tender its Sharespursuant to the terms of a tender offer for Shares by Sembeorp. In addition, theexclusivity letter provided that Biwater would provide reasonable assistance toSembeorp during the Exclusivity Period in its pursuit of a recommendation from theCompany's board of directors.


Representatives of Sembcorp and Credit Suisse also had a discussion withrepresentatives of Biwater and HSBC Advisory to discuss next steps in connectionwith the proposed transaction, including the completion of Sembeorp's outstandingdue diligence and a suggestion that Sembcorp should consider proposing a fixedoffer price per Share rather than a range of per Share offer prices in a written offer tothe Company's board of directors.

On March 7, 2010, Sembcorp submitted a letter to the Company's board ofdirectors and Biwater's board of directors that contained a firm offer by Sembeorp tomake a tender offer to acquire all the issued and outstanding Shares at a fixed priceof US$6.75 per share (the "Firm Offer").... The Firm Offer was subject to certainconditions, including, among other things, that Biwater provide an irrevocableundertaking to tender its Shares in the tender offer and that the Company's board ofdirectors recommend the tender offer. The Firm Offer further provided that thetender offer was to be subject to a minimum condition of 80% of the issued andoutstanding Shares being validly tendered and not withdrawn.

-23-5722412



The purpose of the Offer is to enable Purchaser to acquire control of the Companyeither through the acquisition of all of the issued and outstanding Shares, or, if fewerthan all of the issued and outstanding Shares are validly tendered and not properlywithdrawn prior to the Expiration Date, such lesser number of Shares as are validlytendered and not properly withdrawn, subject to the conditions of the Offer describedin Section 13 of this Offer to Purchase. The purpose of the Offer is also to provide anopportunity for the minority investors in the Company to sell their Shares at the sameprice as the Stockholder.


disclosed, at a minimum, (i) why Sembcorp did not go directly to the Cascal Board with its offer for

the Company; (ii) the discussions Sembcorp had internally or with Biwater, Credit Suisse, and/or

HSBC regarding the different approaches to the Board, including any discussions regarding conduct

in breach of the duties owed to the Company's shareholders by Biwater; (iii) discussions regarding

alternate terms and/or conditions, including discussions about alternate bidders and/or prices higher

than $6.75; and (iv) information regarding how Sembcorp came to the terms and conditions of its

Tender Offer, including whether it was the result of any influence from Biwater, Credit Suisse,

and/or HSBC.


disclosure of the information, Cascal shareholders were misled into believing the terms and

conditions of the Tender Offer were the result of Sembcorp's independent decision and analysis, and

not the result of improper acts in collusion and/or influences by Sembcorp, Biwater, HSBC and/or

Credit Suisse to deliberately and knowingly deprive the Company's shareholders of the full value of

their shares in Cascal.

-24-572241_2


Conflicts of Interest

103. Page 28 of the Offer to Purchase provides: "On October 28, 2009, Sembcorp

informed Biwater and HSBC Advisory that it had engaged Credit Suisse (Singapore) Limited

("Credit Suisse") as its financial advisor."


In addition, the exclusivity letter provided that Biwater would provide reasonableassistance to Sembcorp during the Exclusivity Period in its pursuit of arecommendation from the Company's board of directors, and would procure that,subject to their fiduciary duties, Larry Magor and Adrian White, in their capacity asdirectors of the Company, support the firm offer.

105. Page 6 of the Amendment provides:

"Larry Magor, Chief Executive Officer of Biwater, was the main Biwaterrepresentative that Sembcorp was negotiating with on the price, structure of thetransaction and the terms and conditions of the Tender Offer and StockholderSupport Agreement. Sembcorp understands from Biwater that Mr. Magor had beencommunicating with the Company's board of directors in connection with the Offer.Following the consummation of the Offer, Mr. Magor will not have any role in themanagement or operations of the Company."


disclosed, at a minimum, (i) whether Sembcorp and Credit Suisse discussed Credit Suisse's prior

work for the Company; (ii) White's connection with Biwater; (iii) whether Sembcorp promised

White any post-acquisition positions and/or benefits; (iv) whether Sembcorp discussed with Magor

and/or White their personal financial situation in light of Biwater's financial distress; (v) whether

White and/or Magor provided Sembcorp any information about Cascal that they possessed as

directors of the Company; and (vi) whether Sembcorp, White and/or Magor discussed White and/or

Magor's duties to the Company's shareholders.


disclosure of the information, Cascal shareholders were misled into believing that: (i) White had no

-25-572241_2


connection with Biwater or else it would have been disclosed like Magor; (ii) whether White was

promised benefits or not was immaterial to the Company's shareholders decision to tender; (iii)

Sembcorp did not know and/or did not take any advantage of Magor, White and/or Credit Suisse's

connections with Cascal in making its Tender Offer.

The Structure of the Tender

108. Page 6 of the Amendment provides:

"Sembcorp, Biwater and their respective legal and financial advisors negotiated thestructure of the two-tiered offer in further detail. Sembcorp's legal advisor had anumber of communications with the SEC Staff during which Sembcorp's legaladvisor proposed the following structure. If less than 80% of the outstanding shareswere tendered and not withdrawn in the offer, Sembcorp would pay to allstockholders an offer price of US$6.40 and if at least 80% of the outstanding sharesare tendered and not withdrawn, Sembcorp would pay to all stockholders an offerprice of US$6.75. If the 80% threshold was reached at the expiration of the initialoffer period, Sembeorp would have a subsequent offering period of at least tenbusiness days with the offer price of US$6.75. If the 80% threshold was not reachedat the expiration of the initial offer period, Sembcorp may-have a subsequent offeringperiod of at least three business days with the offer price of US$6.40. If the 80%threshold is reached during the subsequent offering period, Sembcorp would extendthe subsequent offering period until at least ten business days after it announced thatthe 80% threshold had been reached during which time the price paid to tenderingstockholders will be US$6.75. This structure likely would have required the SECStaff to provide no-action or exemptive relief, which the SEC Staff indicated that itwas not initially prepared to do so. The parties then discussed an alternative structurewhereby the offer would initially start out at US$6.40 per Share, subject to theMinimum Condition, and if the 80% Condition was reached, the offer price would beincreased to $6.75 per Share and the offer would be extended for an additional tenbusiness days. However, after further discussions, the parties determined that thisstructure was more cumbersome and would likely delay the closing of the offer, sothey reached agreement on the final offer structure whereby the offer would initiallystart out at US$6.75 per Share, subject to the 80% Condition, and if the 80%Condition was not reached at the expiration of the offer, but the Minimum Conditionwas, the offer price would be decreased to $6.40 per Share and the offer would beextended an additional ten business days."


disclosed, at a minimum, (i) the reasons provided by the SEC Staff to Sembcorp why the proposed

structure was not likely to result in no-action or exemptive relief; and (ii) the discussions between

-26-572241_2


Sembcorp, Biwater and/or their advisors regarding the alternate structure in light of the SEC Staff

concerns.


disclosure of the information, Cascal shareholders were misled into believing that the structure of the

Tender Offer is substantively fair and blessed by the SEC Staff.

111. All of the foregoing omissions were material because Cascal shareholders were

entitled to know the whether the terms of the Tender Offer was the result of an arms-length, fair and

robust process or a process full of scheming and fraught with conflicts of interest, intended to

deprive Cascal shareholders of the full value of their interests in Cascal.

112. The Schedule TO constitutes communications made under circumstances reasonably

calculated to result in the procurement of tenders from Cascal shareholders in favor of the Tender

Offer. If less than approximately 36% shares were tendered and/or the Company's shareholders

resisted, Sembcorp would have to seek out alternate ways to acquire all the shares of the Company

that would necessarily cost them more money. Also, as a majority holder seeking to squeeze out the

remaining shareholders, Cascal would be exposed to any liability stemming from the duty owed the

Company's shareholders under applicable law. Thus, under the circumstances, Cascal had a huge

incentive to make sure that most all of Cascal's shareholders tendered.

113. Sembcorp knew that by failing to disclose the above information (which information

is available only to Sembcorp, and not to the Company's shareholders), it would give the Company's

shareholders a false impression that the terms of the Tender Offer was developed pursuant to a

robust and fair process. Sembcorp also knew that by not disclosing any discussions and/or conduct

by any other party that was contrary to the interests of the Company's shareholders that Sembcorp

-27-572241_2


was aware of, the Company's shareholders would have no time and/or means to resist, and rush to

sell their stock or else, face the consequences of having their shares devalued.

114. Had shareholders known the truth, and absent the false and misleading statements in

the Schedule TO, the shareholders who were unaware of untruths and relied thereon would not have

tendered their shares at a lowball price. As such, Cascal's public shareholders' damages were

directly and proximately caused by Sembcorp. By reason of such misconduct, Sembcorp is liable

pursuant to § 14(e) of the Exchange Act.

PRAYER FOR RELIEF

WHEREFORE, plaintiff prays for judgment:

A. Certifying this action as a class action on behalf of Cascal's public shareholders;

B. Declaring that defendant has violated § 14(e) of the Exchange Act;

C. Awarding plaintiff and the members of the Class compensatory and/or rescissory

damages;

D. Awarding plaintiff and the members of the Class pre-judgment and post judgment

interest, as well as reasonable attorneys' fees, expert witness fees and other costs;;

E. Awarding extraordinary, equitable and/or injunctive relief as permitted by law, equity

and the federal statutory provisions sued hereunder, and any appropriate state law remedies; and

F. Such other and further relief as this Court may deem just and proper.

JURY DEMAND

Plaintiff demands trial by jury.

-28-5722a1_2


DATED: July 16, 2010 ROBBINS GELLER RUDMAN & DOWD LLPSAMUEL H. RUDMANDAVID A. ROSENFELDMARK S. REICH

DAVID A. ROSENFELD

58 South Service Road, Suite 200Melville, NY 11747Telephone: 631/367-7100631/367-1173 (fax)

ROBBINS GELLER RUDMAN & DOWD LLPDARREN J. ROBBINSRANDALL J. BARONA. RICK ATWOOD, JR.

- DAVID T. WISSBROECKEREUN J1N LEE655 West Broadway, Suite 1900San Diego, CA 92101Telephone: 619/231-1058619/231-7423 (fax)

LAW OFFICES OF CURTIS V. TRINKO, LLPCURTIS V. TRINKO16 West 46th Street, 7th FloorNew York, NY 10036Telephone: 212/490-9550212/986-0158 (fax)

Attorneys for Plaintiff

-29-572241_2


CERTIFICATE OF SERVICE

I, Kelly Stadelmann, hereby certify that on July 16, 2010, I caused a true and

correct copy of the attached:

AMENDED COMPLAINT FOR VIOLATION OF § 14(E) OF THESECURITIES EXCHANGE ACT OF 1934

to be served by first-class mail to all counsel listed on the attached service list.

Kell : tadelmann


SEMBCORP

Service List — 7/16/10 (10-0100)Page 1 of 1

Counsel For Defendant(s)

Anthony Mathias CandidoBrian HoffmannLaura Jane McLarenClifford Chance US, LLP31 West 52nd StreetNew York, NY 10019

212/878-3140212/878-8375(Fax)

William E. Wallace, IIIClifford Change US, LLP2001 K St., NWWashington, DC 20006

202/912-5000202/912-6000(Fax)

Counsel For Plaintiff(s)

Darren J. RobbinsRandall J. BaronRobbins Geller Rudman & Dowd LLP655 West Broadway, Suite 1900San Diego, CA 92101

619/231-1058619/231-7423(Fax)

Samuel H. RudmanDavid A. Rosenfeld58 South Service Road, Suite 200Melville, NY 11747

631/367-7100631/367-1173

Curtis Victor TrinkoLaw Offices of Curtis V. Trinko, LLP16 West 46`h Street, Seventh FloorNew York, NY 10036

212/490-9550212/986-0158

Documents

Alan G. Stevens, et al. v. Sembcorp Utilities Pte Ltd., …securities.stanford.edu/.../2010720_f01c_10CV04481.pdfCase 1:10-cv-04481-SHS Document 14 Filed 07/20/10 Page 1 of 32 UNITED