A US jury ruled on Friday that French media giant Vivendi recklessly misled investors about the company’s finances, opening the door to a potential multibillion dollar payout to shareholders.
But former Vivendi chairman and chief executive Jean-Marie Messier was cleared along with his chief financial officer Guillaume Hannezo by the jury, which had been deliberating over two weeks in the shareholder lawsuit.
Vivendi and Messier had been accused of making false statements about company finances between 2000 and 2002, before a collapse of the group’s share price in the lawsuit charging “recklessly misleading communication.”
The class-action lawsuit brought in US federal court in 2002 had sought as much as US$11.5 billion to compensate shareholders.
Lead plaintiff attorney Arthur Abbey said the jury decision could result in a payout of some US$4 billion after shareholder claims are examined.
Other attorneys said the total could be as much as US$9.3 billion.
“This verdict shows that deserving investors can get just compensation through class actions, even against the strongest opposition. Very few of these cases go all the way to trial, and we are gratified at the outcome,” a joint statement from plaintiff attorneys said.
Vivendi said in a statement it “strongly disagrees with the findings” and would appeal.
The company said the amount of damages that Vivendi may be required to pay “remains uncertain and will be known at a later and as yet undetermined stage.”
The verdict calculates damages on a per-share and per-day basis and “it is impossible to know at this time the total number of shares traded by class members, the dates of the relevant sales and the number of class members who will submit a valid claim after receiving notice of the decision,” Vivendi said.
Maxime Delespaul, a lawyer for French plaintiffs, called the decision “a wonderful victory” for shareholders and predicted the ruling would hold up on appeal.
Messier, a high-flying magnate forced out as CEO and chairman of Vivendi in July 2002 as the group was teetering with 35 billion euros (US$47 billion) in debt, was not present when the verdict was read.
The case stems from a huge boom and bust in Vivendi, which went on a massive acquisition spree under Messier’s leadership as it transformed itself from a water utility to a global media giant.
The company changed its name to Vivendi Universal after a complex deal that allowed it to acquire US-based Universal Studios and other properties to refocus the group.
In the lawsuit, the plaintiffs said Vivendi and Messier failed to disclose risks associated with the growth spree that led to big losses and writedowns.
Company attorneys argued that Vivendi, like other firms, saw its share price hammered during the collapse of the tech sector and the economic fallout following the terror attacks of Sept. 11, 2001.
The lead plaintiffs were the retirement system for Miami Beach municipal employees and several individuals.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by