Sunterra Finally Admit

2006-04-24T02:27:38+02:00

Sunterra Issues Statement –

Tue Apr 11, 2006 7:00 AM ET

“ LAS VEGAS, NV, Apr 11 (MARKET WIRE) --

On April 10, 2006, Sunterra Corporation (NASDAQ: SNRR) filed an SEC Form 8-K/Aamending Item 4.01 of its SEC Form 8-K as filed on March 27, 2006. In both its March 27th and April 10th filings, Sunterra indicated that the Audit and Compliance Committee of the company's Board of Directors had dismissed Grant Thornton LLP as the company's independent registered public accounting firm on March 21, 2006.

The April 10th filing also included a letter from Grant Thornton that referred to certain allegations made by a former employee regarding Sunterra's European operations. These allegations principally concerned Sunterra's operations in Spain. Sunterra's decision to terminate Grant Thornton was completely unrelated to these allegations, which were first made in December 2005 by the former Sunterra employee shortly after his termination for cause – a termination subsequently upheld by a Spanish court.

In December 2005, within one business day of the receipt of the allegationsand prior to the issuance of the company's fiscal 2005 financial statements, Sunterra's management informed both Grant Thornton and Sunterra's Audit and Compliance Committee of the nature of the former employee's allegations.

Management reported that they had promptly brought the allegations to the attention of the company's internal auditors and in-house legal counsel for investigation. This investigation was subsequently supplemented by a further investigation by external counsel.

As the former employee has recently repeated his original allegations to
Grant Thornton following the abovementioned Spanish court hearing, and as the same external counsel had investigated both the issues resulting in theformer employee's termination for cause and the employee's subsequent allegations, Sunterra's Audit and Compliance Committee, on April 9, 2006, authorized the retention of independent legal counsel to investigate, review and advise the Committee with respect to the allegations and any other matters that may arise in connection with it.

Sunterra management does not currently expect to comment further on this
matter until the investigation is completed, which it hopes and expects
canbe done in a timely manner."

From http://www.marketwire.com/mw/release_html_b1?release_id=122492

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Sunterra Finally Admit