Feeds

15,000 shareholders hire 630 lawyers to sue Deutsche Telekom

They do things differently in Germany

  • alert
  • submit to reddit

Secure remote control for conventional and virtual desktops

The case will go down in legal history as the biggest of its kind: more than 15,000 shareholders are suing Deutsche Telekom in 2,200 separate cases. They accuse the telco of inflating the value of assets before it was privatised.

Investors feel there were misled about the value of Telekom's real estate holdings: some 35,000 buildings and plots of land, which were consistently overstated in each of Deutsche Telekom's share offerings during 1996, 1999 and 2000. However, shareholders were made aware of the problem only beginning of 2001. Subsequently, Deutsche Telekom shares went into freefall, losing 92 per cent of their value. It should be noted that 2001 and 2002 were exceedingly bad years on all the bourses for all European telcos.

Investors also feel cheated over Deutsche Telekom's planned acquisition of US mobile phone operator VoiceStream. The company paid $22.5bn (€17.2bn) for VoiceStream, a price seen as unrealistic by many analysts.

The investors have instructed 630 lawyers to file for around €100m ($130m) in compensation. Everyone involved in the privatisation of Deutsche Telekom, including former chief Ron Sommer and the underwriting banks, are held responsible.

In Germany there is no such thing as a class-action suit. The Frankfurt judge in charge of the proceedings must decide each case individually. To make this undertaking bearable for everyone, about ten cases will serve as a basis for most of his rulings.

In the court the judge today criticised the way Deutsche Telekom AG valued its real estate assets, saying the process the company used was insufficient. However, the judge also believes the valuation itself isn't necessarily wrong. The complainants must prove that a lower valuation would have been warranted. ®

Related stories

Google sued by smut peddler
RIAA sues filesharing US students
Judge dismisses keylogger case

Secure remote control for conventional and virtual desktops

More from The Register

next story
6 Obvious Reasons Why Facebook Will Ban This Article (Thank God)
Clampdown on clickbait ... and El Reg is OK with this
No, thank you. I will not code for the Caliphate
Some assignments, even the Bongster decline must
Fast And Furious 6 cammer thrown in slammer for nearly three years
Man jailed for dodgy cinema recording of Hollywood movie
Caught red-handed: UK cops, PCSOs, specials behaving badly… on social media
No Mr Fuzz, don't ask a crime victim to be your pal on Facebook
Barnes & Noble: Swallow a Samsung Nook tablet, please ... pretty please
Novelslab finally on sale with ($199 - $20) price tag
Ballmer leaves Microsoft board to spend more time with his b-balls
From Clippy to Clippers: Hi, I see you're running an NBA team now ...
Video of US journalist 'beheading' pulled from social media
Yanked footage featured British-accented attacker and US journo James Foley
Call of Duty daddy considers launching own movie studio
Activision Blizzard might like quality control of a CoD film
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Endpoint data privacy in the cloud is easier than you think
Innovations in encryption and storage resolve issues of data privacy and key requirements for companies to look for in a solution.
Scale data protection with your virtual environment
To scale at the rate of virtualization growth, data protection solutions need to adopt new capabilities and simplify current features.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?