Renaissance Capital Management, Inc., NNPD Escrow Holding Company, Inc., Allen Andrescu, Richard Brower, Mark Coates, Vikram Randhawa, and Tejbir Singh, Defendants, and Jon Andrescu, Ana Andrescu, and Magic Knits, Ltd., Relief Defendants

Litigation Release No. 18075 / April 7, 2003

SEC Obtains Summary Judgment against Defendants in $2.2 Million Offering Fraud

Securities and Exchange Commission v. Renaissance Capital Management, Inc., NNPD Escrow Holding Company, Inc., Allen Andrescu, Richard Brower, Mark Coates, Vikram Randhawa, and Tejbir Singh, Defendants, and Jon Andrescu, Ana Andrescu, and Magic Knits, Ltd., Relief Defendants, 00 Civ. 1848 (TCP) (WDW) (E.D.N.Y.)

On March 24, 2003, Judge Thomas C. Platt of the United States District Court for the Eastern District of New York granted summary judgment in favor of the Securities and Exchange Commission in an enforcement action arising out of the fraudulent offer and sale of securities in NNPD Textiles, Inc. ("NNPD"). In its order, the court found that the three remaining defendants in the action, Richard Brower, Mark Coates, and Tejbir Singh ("Remaining Defendants"), are liable for violating antifraud and other provisions of the federal securities laws, and that relief defendants Ana Andrescu, Jon Andrescu, and Magic Knits ("Relief Defendants") are liable for receiving illegal proceeds from the fraud.

In granting the Commission's motion for summary judgment, the court permanently enjoined each of the Remaining Defendants from future violations of the antifraud and registration provisions of the federal securities laws - specifically Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The court also ordered that the Remaining Defendants pay civil penalties, and that the Remaining and Relief Defendants disgorge ill-gotten gains plus prejudgment interest, in amounts to be determined by Magistrate Judge William D. Wall. Judge Wall has scheduled a hearing on May 5, 2003 to determine the disgorgement, pre-judgment interest and civil penalty amounts.

In its complaint, the Commission alleged that: From at least October 1997 to at least March 1999, the defendants fraudulently raised over $2.2 million by making a litany of false statements to investors concerning a private placement in NNPD. For example, each of the Remaining Defendants falsely represented that investors would be able to sell their NNPD shares for a substantial profit in an imminent initial public offering ("IPO"), when, in fact, no IPO was planned. Most of the proceeds raised in the offering were misappropriated to pay personal expenses of the defendants. NNPD securities were not registered with the Commission or subject to an exemption from filing.

Previously, on April 5, 2001, the court entered default judgments against Allen Andrescu, Vikram Randhawa, and two companies Andrescu controlled, Renaissance Capital Management, Inc. ("Renaissance Capital"), and NNPD Escrow Holding Company, Inc. ("NNPD Escrow"), permanently enjoining them from violating Sections 5(a), 5(c), and 17(a) of the Securities Act, Section 10(b) of the Exchange Act, and Rule 10b-5 thereunder. In its April 5, 2001 judgment, the court also ordered: Allen Andrescu and NNPD Escrow to pay, jointly and severally, $1,877,691, representing $1,599,722 in ill-gotten gains derived from their fraudulent conduct plus prejudgment interest of $277,969; Allen Andrescu to pay a $100,000 civil penalty; NNPD Escrow to pay a $500,000 penalty; Renaissance Capital to pay $434,291, representing $370,000 in ill-gotten gains derived from its fraudulent conduct plus prejudgment interest of $64,291; Renaissance Capital to pay a $370,000 civil penalty; Randhawa to pay $326,693, representing $278,330 in ill-gotten gains derived from his fraudulent conduct plus prejudgment interest of $48,363; and Randhawa to pay a $100,000 civil penalty.