DECEMBER 5, 2000
Now EM.TV faces the threat of legal action
THOMAS HAFFA's EM.TV - or at the least the remains of it - is being threatened with legal action by some of its smaller investors who have lost large sums of money because of the company's collapsing share price in recent weeks. Seven weeks ago the EM.TV shares were valued at around $50 each. Today they are worth only around $7 and there is much confusion on the Neuer Markt stock exchange in Frankfurt as to the real value of the company. The problems began in early September when EM.TV announced profits for the first six months of the year at around $50m. These looked good but with a few weeks there were questions about the accounting methods used and the company was forced to admit that "mistakes" had been made. This sent the share price into its first dive in mid-October.
In an effort to stop the sliding share price the company announced the appointment of a new chief financial officer and a few days ago he announced that the company was slashing its earnings predictions by 90% for the year. This caused a complete collapse of investor confidence in the company and the resignation of Thomas Haffa's brother Florian who had been responsible for the earlier figures.
There is now pressure in Frankfurt for there to be more regulation on the Neuer Markt exchange to stop similar disasters happening again and small shareholders who have lost everything are deciding whether or not to pursue the Haffa Brothers to try to get some of their money back.