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.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
RSS