Deutsche Telekom May Face Damages of $212 Million After Court Ruling
November 30 2016 - 10:41AM
Dow Jones News
By Friedrich Geiger
BERLIN--Deutsche Telekom AG (DTEGY) may face significant damages
after a German court on Wednesday ruled it must pay compensation
due to false information distributed as part of its public share
offer in 2000.
The ruling by a regional court in Frankfurt could affect more
than 17,000 plaintiffs and result in damages of roughly 200 million
euros ($212 million), law firm Tilp said.
Telekom has the right to appeal the decision, a company
spokesman said, but hasn't decided yet whether to do so.
In June 2000, Telekom offered shares for EUR63.50 a piece. The
share price declined steeply in the following quarters, hitting a
low of EUR8.42 in 2002.
Two years ago, Germany's Supreme Court said the share-offer
prospectus had contained an error: it said Telekom had sold shares
in Sprint Inc. that had actually been transferred to a subsidiary,
meaning the group still bore the risk of a decline in these
shares.
The Supreme Court then referred the case to the Frankfurt court
to decide whether the company could be held liable. Telekom need
only pay damages if this misinformation prompted plaintiffs to buy
shares, the Frankfurt court said Wednesday. This must be decided on
a case-by-case basis by a local district court.
(END) Dow Jones Newswires
November 30, 2016 10:26 ET (15:26 GMT)
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