DECEMBER 8, 2000
Legal actions begin in Germany
A number of shareholders in EM.TV have filed law suits against the company in Germany, claiming that the management concealed the real state of the firm's financial situation in an effort to keep the share price from falling. It was only a matter of weeks between a statement which said that the company would meets its projected profit of $240m for the year 2000 and a second announcement that the earnings would be only $23m.
The state prosecution service in Munich must now investigate the extent to which the EM.TV management were aware of the problems and whether or not they knowingly presented a false picture. EM.TV is also being probed by stock exchange regulators to see if there is any evidence of insider trading prior to the profit warning as the share price fell dramatically before any announcement was made.
The share price continues to remain weak as investors avoid getting involved as analysts are unsure as to the exact position of EM.TV's finances. Most people are in agreement that elements of the company can be very profitable but it remains to be seen whether these can offset the problems which have been encountered. There is considerable pressure from shareholders for the assets to be sold to the highest bidder so that some money can be recouped from the fiasco. There seems to be almost no confidence left in the current management.
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