Vivendi, T-Mobile Spat Heats Up with Fraud Suit

26 October 2006

SEATTLE: Are competitors gaining the upper hand? Beating you to the punch? Snaffling your assets? If so, call-in Rico - not as some might think a Marseilles waterfront mafiosa but an acronym for a voguish slice of US legislation: the Racketeer Influenced and Corrupt Organisations Act.

Rico, on this occasion, has been invoked in a US court by a French media mammoth Vivendi to sue a German telecoms titan T-Mobile over alleged malfeasance concerning the former's investment in Polish telco Polska Telefonia Cyfrowa.

Vivendi's suit claims that T-Mobile illegally appropriated Vivendi's $2.5 billion (€1.99bn; £1.33bn) investment in the Polish company PTC via a pattern of fraud and racketeering.

The complaint, filed under a law more commonly used against All-American organised crime, was lodged in federal court in Seattle, Washington, where T-Mobile USA is based. T-Mobile Deutschland, Deutsche Telekom and Polish businessman Zygmunt Solorz-Zak are also named.

Vivendi chief executive Jean-Bernard Lévy says the complaint was filed in an effort to force T-Mobile to resolve the dispute. He considers that T-Mobile and Mr Solorz-Zak's Elektrim illegally appropriated its $2.5bn investment in PTC and, at every turn, have defied court orders.

Lévy adds: "By filing this Rico complaint, Vivendi asks the court for a simple remedy: give us back our money or our PTC shares. Fairness and justice must prevail."

But Deutsche Telekom dismisses Vivendi's claims as "absurd and nonsensical accusations . . . that are far removed from reality [joining] a whole list of other accusations that seem to have the objective to discredit Deutsche Telekom."

Data sourced from Financial Times Online; additional content by WARC staff