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Wednesday, September 24, 2003

More Trouble for Alstom

I wonder what they'll make of this in Brussles?

Debt-stricken French engineering group Alstom received a sharp reminder yesterday that its fight for survival is just beginning when it emerged that the manufacturer of London Underground trains is facing a class action lawsuit in the United States. The news - which came one day after a controversial €3.2bn (£2.2bn) rescue plan for Alstom was agreed - appeared to unsettle investors, who began to fret about the company's long term viability, sending its shares plunging 14% on the Paris stock exchange at one stage. The complaint is similar to that levelled at Enron in the US last year and alleges that Alstom deliberately deceived investors by overestimating its results and understating its net debts at various times between November 1998 and June 2003. The plaintiffs are unnamed minority shareholders who claim that Alstom artificially propped up its share price in the process. They are seeking an undisclosed amount to compensate them for subsequent losses. The fact that US lawyer Bill Lerach, the scourge of corporate America and the man who lodged the Enron complaint, is said to be handling the case will make Alstom executives all the more nervous. According to the French magazine, L'Expansion, the case has already been filed in New York and targets Alstom itself as well as the present and former chief executives, Patrick Kron and Pierre Bilger.
Source: The Guardian

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