UPDATE: Vivendi Says Wins Victory In Polish Telecom Dispute
September 28 2009 - 9:03AM
Dow Jones News
French entertainment-to-telecom conglomerate Vivendi Monday said
it won a victory over Deutsche Telecom (DT) in its decade-long
battle over the control of Polish mobile phone operator Polska
Telefonia Cyfrowa, or PTC, but any final resolution is likely to be
some way off.
Deutsche Telekom and Vivendi are facing off over a 48% stake in
PTC, which is claimed by each of them based on previous deals with
Polish conglomerate Elektrim SA, the stake's original owner.
Deutsche Telekom and Vivendi have locked horns over ownership of
PTC in courtrooms in Austria, Germany, France, Poland and the U.S.
since litigation on the matter began in December 2000.
According to Vivendi, the Warsaw appeals court in a Sept. 24
decision sided with the French company, refusing to apply an
arbitration ruling made in Vienna in late 2004 on the basis of
which Deutsche Telecom and Elektrim had claimed to control PTC.
"Deutsche Telecom and Elektrim had misused the arbitral award
for years as false justification to lay claim to control those PTC
shares," Vivendi said in a statement.
The ruling is the latest development in a dispute that goes back
to 1999, when Vivendi and Elektrim formed a joint venture, Elektrim
Telekcomunikacja, or Telco, which has invested around EUR2 billion
in PTC over the past ten years.
Deutsche Telekom, which held 22.5% of PTC at the time, disputed
the joint venture and the entry of the French group, which led to a
protracted and complex legal battle involving around fifty cases
across the world.
Under control of a new owner, Polish billionaire Zygmunt Solorz,
Elektrim eventually abandoned its one-time ally Vivendi and sided
with Deutsche Telekom in the dispute.
Since 2005, when Elektrim and Deutsche Telekom ousted Vivendi
representatives from PTC in a boardroom coup, the Polish
conglomerate and Deutsche Telekom have operated the company.
The execution of the Polish ruling could take weeks or months as
Telco can't independently apply for the ownership change to
Poland's National Court Register using the Sept. 24 ruling, a
source familiar with the matter told Dow Jones Newswires.
"Under Polish corporate law, Telco cannot apply to the National
Court Register on its own to correct the PTC ownership record to
reflect Telco as the owner of the 48% stake," the source said. "The
body that is authorized to do that is the Deutsche
Telekom-controlled executive board of PTC, and naturally it's
doubtful that the current board will do that."
Deutsche Telecom, which owns 49% of PTC, said Monday it will
appeal the ruling, which it said has no material impact on the
structure of PTC.
Company Web site: www.vivendi.com
-By Ruth Bender and Marcin Sobczyk, Dow Jones Newswires; +33 1
40 17 17 54; ruth.bender@dowjones.com
(Archibald Preuschat in Duesseldorf contributed to this
report.)
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