NOVEMBER 29, 2000
BEING beaten in Formula 1 by Ferrari did not please the bosses of DaimlerChrysler but they have more important things to worry about at the moment with the American end of the business causing the German company considerable financial difficulties at the moment. And to make matters worse American billionaire investor Kirk Kerkorian has not launched a $9bn lawsuit against the company which alleges that the company deceived shareholders it bought Chrysler in 1998.
The lawsuit has been filed in a District Court in Delaware and claims that DaimlerChrysler bosses "knowingly deceiving" Chrysler shareholders by representing the deal as a "merger of equals" rather than a takeover. Kerkorian, who holds a large shareholding in Chrysler said he would not have voted in favor of the deal if he had known what was going to happen. He is particularly unhappy with DaimlerChrysler chairman Jurgen Schrempp who told The Financial Times newspaper recently that he lied to Chrysler bosses in order to complete the deal.
DaimlerChrysler has dismissed the claim, saying that is "without merit".
Kerkorian (83) tried to acquire Chrysler in 1995 in a hostile takeover bid. This was beaten off but he retained a 13.75% stake in the company. He is now DaimlerChrysler's third largest shareholder, controlling around four percent of the business. Since the takeover DaimlerChrysler's shares have more than halved in value. Kerkorian is claiming $9bn in losses and wants the court to break up the DaimlerChrysler deal.
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