German Prosecutors Widen Probe into EM.TV

Published December 29th, 2000 - 02:00 GMT

German prosecutors have added suspected fraud to their inquiry against troubled media group EM.TV's founder Thomas Haffa and his younger brother, financial director Florian Hoffa, a justice official said on Friday. 

"We are also looking into suspicions of fraud as part of our judicial inquiry into breach of stock exchange rules," said Munich prosecutor Manfred Wick told AFP, confirming a report in daily Der Speigel due to appear on Monday.  

"We are currently working in close cooperation with the German stock exchange regulator," he said. 

The Munich prosecutor's office raided EM.TV's office a few days before Christmas. 

Der Speigel also reported that Thomas Haffa allegedly broke an undertaking not to sell his shares in EM.TV, when he sold stock worth around 20.5 million euros in January and February to a financial investor. 

The disposals allegedly breached commitments he made to US bank Merrill Lynch and German bank WestLB, that he would not sell shares within six months of a share capital increase made in November 1999.  

German prosecutors opened on December 13 an inquiry against the Haffa brothers, who are suspected of breaching stock exchange legislation requiring transparent financial results from listed firms. 

The inquiry was opened after an initial review following seven separate complaints from small shareholders in the company, who believed they were swindled by the collapse of the EM.TV share price. 

The EM.TV bosses were suspected of embellishing the financial results. 

A preliminary investigation by the stock exchange authorities has already shown up possible breaches. Under German law, fraud is punishable by heavy fines and prison sentences of up to five years. 

The film and television-rights company had run into trouble after an energetic and pricey shopping spree in which it snapped up stakes in the holding company for Formula One racing, SLEC, and the producer of the Muppet Show, The Jim Henson Company.  

The company also acquired part of filmmaker Constantin Film and of film rights' trader Tele-Muenchen group. 

Excluding The Jim Henson Company, Formula One and the Tele Muenchen, EM.TV posted a pre-tax loss before extraordinary items of 69.19 million euros in the period from January to September -- BERLIN (AFP)  

 

 

© 2000 Al Bawaba (www.albawaba.com)

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