e-district.net divvies up disgraced CEO's shares
e-district.net, the community site with the blown-up reader numbers and blown-up turnover, has closed the book on the man who did the inflating.
It has secured high court approval to settle proceedings against Steven Laitman, founder and former CEO, who pretended that money he pumped into the AIM-listed company was in fact advertising sales receipts.
Fraud Squad investigations into Laitman's actions are continuing, e-district says.
Even if commercial proceeding had been successful, they would not "yield any net financial benefit to e-district", the company says. It bases its decision to settle on warranties given by Laitman as to his financial wherewithal. If these prove to be false, e-district is free to begin proceedings again.
Under the settlement, Laitman is handing over his shares in the company - 11 per cent of the share capital to "other shareholders". So who's eligible for the pro rata redistribution?
"Broadly these are shareholders, other than management and major shareholders immediately preceding flotation, on the register as at 19 February 2001 who validly apply for such shares" e-district says in a statement.
Also people who bought shares before shortly before 19 February but were not on the share register on that date, are also eligible. They need to register their claim with the company.
On e-district's balance sheet, as of 30 June 2001 is
£980,615 recorded as exceptional receipts. This had initially been recorded as sales revenues. All came from Laitman's private pockets. The sum is now to be treated as an exceptional item in the profit and loss account - unsurprisingly, Laitman does not want his money back.
e-district.net is recasting itself as a developer of software platforms, such as games, for Digital TV and broadband operators. It has several customers, but revenues are thin on the ground - it recorded a tiny turnover of £2183 for the six months to June 20.
The company still has a few million quid coined from its IPO in the bank, but it will really need to pump up sales quickly, if it is to gain any credibility with the investment community. ®
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