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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