Thomas and Florian Haffa, the brothers who headed German media group EM.TV until the dramatic collapse in its share price, have appeared in court charged with misleading the public over the state of the company’s finances.
The siblings – respectively former ceo and finance chief at EM.TV – are alleged to have deceived investors in late 2000 by sticking to earnings targets they knew could not be attained.
In October of that year, the company had to restate interim results, before shocking investors in December with the news that full-year profits would be 90% lower than expected [WAMN: 04-Dec-00].
The brothers deny the charges, arguing that they portrayed the company’s finances as accurately as possible. They could be handed a jail term of up to three years if convicted.
After embarking on a major acquisition spree, which included the Jim Henson Company and a 50% stake in Formula One motor racing, EM.TV was left with huge debts and only narrowly avoided collapse. Its shares have tumbled from €110 ($110; £71) in February 2000 to under €1 today.
The trial, which began on Monday, is expected to last until January 2003 at earliest.
Data sourced from: Financial Times; additional content by WARC staff