Joseph J. Tabacco, Jr. (75284)
BERMAN, DeVALERIO, PEASE & TABACCO, P.C.
425 California Street, Suite 2025
San Francisco, California 94104-2205
Telephone: (415) 433-3200

(Other Plaintiff¹s counsel appear on signature page)

Plaintiff, individually and on behalf of all other persons similarly situated, by his undersigned attorneys, for his complaint, alleges as follows:

1. This Court has jurisdiction over the subject matter of this action under Section 27 of the Securities Exchange Act of 1934 (the "Exchange Act"), 15 U.S.C. §78aa. The claims alleged herein arise principally under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 ("Exchange Act"), 15 U.S.C. §§78j(b) and 78t(a), and Rule 10b-5 promulgated thereunder by the Securities and Exchange Commission ("SEC"), 17 C.F.R. §240.10b-5.

2. Venue is proper in this District pursuant to Section 27 of the Exchange Act and 28 U.S.C. §1391(b). Many of the acts and transactions giving rise to the violations of law complained of herein, including the preparation and dissemination to the investing public of false and misleading financial statements, occurred in this District. In addition, defendant Indus International, Inc. ("Indus" or the "Company") maintains its principal executive offices in this District at 60 Spear Street, San Francisco, California 94105.

3. In connection with the acts, conduct and other wrongs complained of herein, defendants, directly or indirectly, used the means and instrumentalities of interstate commerce, the United States mails, and the facilities of a national securities market.

4. Plaintiff Frederick G. Sherman, Jr. purchased 65 shares of Indus common stock during the Class Period, as detailed in the attached Certification, and suffered damages as a result of the violations of the federal securities laws pled herein.

5. Defendant Indus develops, markets, implements and supports enterprise asset management software and service solutions for businesses worldwide. Indus Solutions are designed to interoperate with third-party applications. Through strategic alliances, the Company works with certain industry-specific vendors to create a software series that provides interoperability with corporate and financial applications, expert systems, and certain industry specific systems to provide complete enterprise-wide solutions that enable the Company's customers to improve operating efficiencies, reduce costs and comply with governmental regulations. The Company derives its revenues primarily from software licenses, implementation, training services and maintenance fees.

6. Until January 12, 2000, defendant William J. Grabske ("Grabske") was Chief Executive Officer and Chairman of the Board of Directors ("the Board") of Indus. As CEO and Chairman of the Board, Grabske signed Indus' Form 10-Q for the third quarter of 1999, which the Company filed with the SEC. On January 12, 2000, Indus announced Grabske's resignation from the Company. For the fiscal year ended December 31, 1998, Defendant Grabske received total compensation from the Company in excess of $730,000. Because of defendant Grabske's position as Chief Executive Officer and Chairman of the Board, he was directly involved in Indus' fraudulent revenue recognition practices and being responsible for the preparation of the Company's financial statements, falsely endorsed as accurate Indus' financial statements reported in the Company's Form 10-Q for the third quarter of 1999. As Chief Executive Officer and Chairman of the Board, he also directed the making of false statements announcing Indus' third quarter 1999 revenues and earnings.

7. Until December 9, 1999, defendant Joan P. Platt ("Platt"), served as Senior Vice President and Chief Financial Officer ("CFO") of Indus. As Senior Vice President and CFO, Platt signed Indus' Form 10-Q for the third quarter of 1999, which the Company filed with the SEC. On December 9, 1999, Indus announced that Platt had resigned from Indus and announced that defendant Ann Ng-Borden had replaced her as CFO. Because of defendant Platt's position as Senior Vice President and Chief Financial Officer, she was directly involved in Indus' fraudulent revenue recognition practices and being responsible for the preparation of the Company's financial statements, falsely endorsed as accurate Indus' financial statements reported in the Company's Form 10-Q for the third quarter of 1999. As Senior Vice President and Chief Financial Officer, she reviewed Indus' financial statement and each underlying account of the financial statements, including the sources of reported revenues and the accounting thereof, and improperly authorized the public issuance of Indus' financial statements which were not prepared in accordance with GAAP. As Senior Vice President and Chief Financial Officer, Platt also directed the making of public statements in announcing Indus' third quarter 1999 revenues and earnings.

8. Defendant Ann Ng-Borden ("Ng-Borden"), served as Vice President of Finance and also served as CFO of Indus after December 9, 1999. As Vice President of Finance, Ng-Borden signed Indus' Form 10-Q for the third quarter of 1999, which was filed with the SEC. On December 9, 1999, Indus announced that defendant Platt, the Company's Senior Vice President and Chief Financial Officer, had left Indus to join another company and announced that Borden would serve as her replacement. Because of defendant Ng-Borden's position of Vice President of Finance and Chief Financial Officer, she was directly involved in Indus' fraudulent revenue recognition practices and being responsible for the preparation of the Company's financial statements, falsely endorsed as accurate Indus' financial statements reported in the Company's Form 10-Q for the third quarter of 1999. As Vice President of Finance and Chief Financial Officer, she reviewed Indus' financial statement and each underlying account of the financial statements, including the sources of reported revenues and the accounting thereof, and improperly authorized the public issuance of Indus' financial statements which were not prepared in accordance with GAAP. As Vice President of Finance and Chief Financial Officer, Ng-Borden also directed the making of public statements in announcing Indus' third quarter 1999 revenues and earnings.

9. Defendants Grabske, Platt, and Ng-Borden (collectively, the "Individual Defendants") were aware of the false and misleading SEC filings, press releases, and other statements complained of herein at the time they were issued and knew they contained false and misleading statements when made.

10. Plaintiff brings this action on his own behalf and as a class action pursuant to Rule 23(a) and Rule 23(b)(3) of the Federal Rules of Civil Procedure on behalf of a class (the "Class") of all persons who purchased Indus common stock from October 29, 1999 through January 27, 2000, inclusive (the "Class Period"). Excluded from the Class are defendants herein, members of the family of each of the Individual Defendants, officers and directors of the Company, parents, subsidiaries and affiliates of the corporate defendant, and the legal representatives, heirs, successors or assigns of any such excluded party.

11. Indus common stock shares were actively traded on the NASDAQ National Market system, which is an efficient market, throughout the Class Period. The members of the Class, as purchasers on that market, are so numerous that joinder of all members is impracticable. While the exact number of Class members can only be determined by appropriate discovery, plaintiff believes that class members number in the hundreds. As of October 31, 1999, Indus had more than 32.3 million shares of common stock issued and outstanding.

12. Plaintiff's claims are typical of the claims of the members of the Class. Plaintiff and all other members of the Class sustained damages as a result of defendants' wrongful conduct complained of herein.

13. Plaintiff will fairly and adequately protect the interests of the other members of the Class and has retained counsel competent and experienced in class and securities litigation.

14. A class action is superior to other available methods for the fair and efficient adjudication of this controversy. Because the damages suffered by individual class members may be relatively small, the expense and burden of individual litigation make it virtually impossible for the class members individually to seek redress for the wrongful conduct alleged herein.

15. Common questions of law and fact exist as to all members of the Class and predominate over any questions affecting solely individual members of the Class. Among the questions of law and fact common to the Class are:

a. whether the federal securities laws were violated by defendants' acts as alleged herein;

b. whether defendants misstated the financial results of the Company for the third quarter of Fiscal 1999, in press releases and filings with the SEC, in direct contravention of generally accepted accounting principles ("GAAP");

c. whether defendants acted knowingly in misrepresenting material facts;

d. whether the market price of Indus common stock during the Class Period was artificially inflated due to the material misrepresentations complained of herein; and

e. whether the members of the Class have sustained damages and, if so, the appropriate measure thereof.

16. Plaintiff knows of no difficulty that will be en-countered in the management of this litigation that would preclude its maintenance as a class action.

17. The names and addresses of the record owners of Indus common stock purchased during the Class Period are available from the Company's transfer agent(s). Notice can be provided to such record owners via first class mail using techniques and a form of notice similar to those customarily used in class actions.

18. On October 28, 1999 -- the first day of the Class Period -- the Company issued a press release announcing its financial results for the third quarter ended September 30, 1999. The Company reported that earnings had increased by 100% over the comparable quarter of the prior year - from $0.05 to $0.10 per share. Defendant Grabske, as Chairman of the Board and Chief Executive Officer commented on the financial results: Our solid performance in the quarter is the result of our continued focus on delivering innovative best-of- breed products and services to meet the demanding needs of our customers. Software license fees exceeded our quarterly targets while continuing to be affected by a general industry slowdown. The services and maintenance revenues growth resulted primarily from new consulting and implementation projects for existing customers. We are pleased that we met our earnings target while making our initial investment in myidus.com, our recently announced eBusiness initiative focused on next generation Internet applications, portals and web-based content solutions for the EAM market.

19. On November 15, 1999, Indus filed with the SEC its report on Form 10-Q for the third quarter ended September 30, 1999. The third quarter Form 10-Q was signed by defendants Grabske, Platt, and Ng-Borden. Indus' reported financial results in its Form 10-Q for the third quarter ended September 30, 1999 were materially false and misleading, as defendants' improper revenue recognition of software licenses materially overstated those results in violation of GAAP. In particular, among other things, Indus recognized as revenue in the third quarter of 1999 sales on software licenses in which there were contingencies that existed, in violation GAAP. As a result of this improper conduct, the Company's revenues and earnings for the quarter were overstated by over 9% and 88.57%, respectively.

20. The Company, however, falsely represented in its Form 10-Q for the third quarter of 1999 that its financial statements, as presented in the Form 10-Q, have "been prepared by management, in accordance with generally accepted accounting principles for interim financial information and pursuant to instructions to Form 10-Q and Article 10 of Regulation S-X." Further, the Company represented that "In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position at September 30, 1999 and results of operations and cash flows for all periods presented have been made."

21. Between October 28, 1999 - the day the Company first announced its results for the third quarter of fiscal 1999 - and January 3, 2000, the price of Indus common stock more than doubled, from $6.25 per share to a Class Period high of $13.0625 per share.

22. On January 6, 2000, the Company issued a press release announcing its preliminary results for the fourth quarter ended December 31, 1999. The Company announced that its revenues would be between $43 million and $45 million, "which will be below the Company's previous expectations." The Company stated that at such revenue levels, "the Company currently expects that results of operations for the fourth quarter of 1999 will be about break-even." The Company attributed the revenue shortfall to "reduced software license fee and services and maintenance revenues primarily attributable to a general industry slowdown in purchases of large scale enterprise applications leading up to the Year 2000."

23. While the stock declined in response to this announcement, the price of the stock continued to be inflated by the reporting of the Company's false financial statements for the third quarter of 1999.

24. On January 12, 2000, the Company issued two press releases. The first press release announced the immediate resignation of defendant Grabske, Indus' Chief Executive Officer and Chairman of the Board of Directors. The second press release announced that defendant Borden had been replaced as CFO of Indus.

25. Only fifteen days after announcing the resignation and replacement of the Company's Chief Executive Officer, Chairman of the Board and Chief Financial Officer, on January 27, 2000, the Company stunned investors by issuing a press release entitled "Indus International Announces 1999 Preliminary Fourth Quarter and Year Results And a Preliminary Restatement of Third Quarter 1999 Results." In this press release, the Company announced that it "is conducting an in-depth review of its revenue recognition practices with the assistance of its independent auditors" and the results of the preliminary review indicate that the Company will have to restate its previously reported net income for the third quarter of Fiscal 1999 by over 88.75%, from $3.5 million to $0.4 million, and will have to restate its third quarter of Fiscal 1999 revenues by approximately $5 million, from approximately $50.9 million to $45.9 million - all of which relate to the restatement of license fees. Further, the Company announced that it anticipates a preliminary net loss of $9.0 million for the fourth quarter ended December 31, 1999. Commenting on the restatement of third quarter results and preliminary fourth quarter and year-end results, Indus' newly appointed President and Chief Executive Officer, stated that:

The Company's new senior management team, in conjunction with its independent auditors and the Board of Directors, is completing a financial and operational review and expects to report final financial results for the fourth quarter and restated results for the third quarter in approximately four weeks.

26. Following the Company's announcement, Dow Jones issued a report on Indus International entitled "New Management Found Irregular Contracts," which quoted a market analyst who participated in the Company's conference call held with analysts after the market closed on January 27, 2000, as stating:

The stock is reflecting (the news) that they are restating third-quarter results. As I understand it from the conference call last night, there were contingencies written for some third-quarter contracts which were outside normal company policy and as part of the management change they went back and reviewed some of the existing contracts.

27. On January 28, 2000, following these disclosures, shares of Indus closed at $7.625 per share on volume of 2.2 million shares, reflecting a decline of approximately 42% below the Class Period high, and 23% below the prior day's closing price.

28. Plaintiff repeats and realleges each of the allegations set forth in the foregoing paragraphs.

29. Throughout the Class Period, defendants individually and in concert, directly and indirectly, by the use and means of instrumentalities of interstate commerce and/or of the mails, engaged and participated in a continuous course of conduct to conceal adverse material information about Indus, including its true financial results, as specified herein. Defendants employed devices, schemes, and artifices to defraud while in possession of material, adverse non-public information and engaged in acts, practices, and a course of conduct that included the making of, or participation in the making of, untrue statements of material facts. Specifically, defendants knew that the Company's reported financial results throughout the Class Period as filed with the SEC and disseminated to the investing public were materially overstated and were not presented in accordance with GAAP.

30. The Individual Defendants, as the directors and/or top executive officers of the Company, are liable as direct participants in the wrongs complained of herein. Through their positions of control and authority as officers and/or directors of the Company, the Individual Defendants were able to and did control the content of the public statements disseminated by Indus. With knowledge of the falsity of the statements contained therein, the Individual Defendants caused the heretofore complained of public statements to contain misstatements and omissions of material facts as alleged herein.

31. Defendants acted with scienter throughout the Class Period, in that they had actual knowledge of the misrepresentations of material facts set forth herein, even though such facts were available to them. The Individual Defendants constituted the senior management of the Company, and were therefore directly responsible for the false and misleading statements and/or omissions disseminated to the public through press releases, news reports, and filings with the SEC.

32. Defendants' misrepresentations were intentional and concealed the Company's true operating condition from the investing public. Defendants engaged in this scheme to inflate the Company's reported revenues and net income in the third quarter of fiscal 1999, to create the illusion that Indus was a successful, strong and profitable company.

33. As a result of these deceptive practices and false and misleading statements and/or omissions, the market price of Indus common stock was artificially inflated during the Class Period. In ignorance of the false and misleading nature of the misrepresentations described above and the deceptive and manipulative devices employed by defendants, plaintiff and the other members of the Class, in reliance on either the integrity of the market or directly on the statements and reports of defendants, purchased Indus common stock at artificially inflated prices.

34. Had plaintiff and the other members of the Class known of the material adverse information not disclosed by defendants, or been aware of the truth behind defendants' material misstatements, they would not have purchased Indus common stock at artificially inflated prices.

35. By virtue of the foregoing, defendants have violated Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder.

36. Plaintiff repeats and realleges each of the allegations set forth in the foregoing paragraphs.

37. Each of the Individual Defendants acted as a controlling person of the Company within the meaning of Section 20 of the Exchange Act during the Class Period. Specifically, defendant Grabske had the power and authority to cause the Company to engage in the wrongful conduct complained of herein, by virtue of his position as Chief Executive Officer and Chairman of the Board. Further, defendant Platt had the power and authority to cause the Company to engage in the conduct alleged herein by virtue of her position as Senior Vice President and Chief Financial Officer. Moreover, defendant Ng-Borden had the power and authority to cause the Company to engage in the conduct alleged herein by virtue of her position as Vice President of Finance and Chief Financial Officer. These defendants were each in a position to control or influence the contents of, or otherwise cause corrective disclosures to have been made in the Company's SEC filings, along with the Company's other public statements that contained materially false and misleading statements that were disseminated during the Class Period.

38. By reason of the wrongful conduct alleged herein, the Individual Defendants are liable pursuant to Section 20(a) of the Exchange Act. As a direct and proximate result of their wrongful conduct, plaintiff and the other members of the Class suffered damages in connection with their purchases of Indus common stock during the Class Period.

WHEREFORE, plaintiff, on behalf of himself and the other members of the Class, prays for judgment as follows:

1. Declaring this action to be a proper class action maintainable pursuant to Rule 23 of the Federal Rules of Civil Procedure and declaring plaintiff to be a proper Class representative;

2. Awarding plaintiff and the other members of the Class compensatory damages as a result of the wrongs alleged in Counts I and II of the Complaint;

3. Awarding plaintiff and the other members of the Class their costs and expenses in this litigation, including reasonable attorneys' fees and experts' fees and other costs and disbursements; and

4. Awarding plaintiff and the other members of the Class such other and further relief as the Court may deem just and proper.

Plaintiff hereby demands a trial by jury.

Source: File to epost from Berman DeValerio Pease & Tabacco, P.C.