A Las Vegas billionaire is suing DaimlerChrysler for more than R6,3 billion, claiming Daimler-Benz organised a takeover of Chrysler, all the while claiming the companies were being joined in a "merger of equals."
Las Vegas billionaire Kirk Kerkorian, 86, is suing DaimlerChrysler for more than R6,3 billion, claiming Daimler-Benz organised a "massive and well-planned" takeover of Chrysler, all the while claiming the companies were being joined in a "merger of equals."
Kerkorian's lawyer Terry Christensen reportedly said Daimler-Benz avoided paying an acquisition fee of up to 62 per cent on the billionaire's shares when the companies merged. Kerkorian owned 14 per cent of Chrysler's shares at the time of the merger, making him the company's primary shareholder.
"They (Daimler-Benz) took control and didn't pay for it," Christensen said in a statement, the AP press agency reported on Tuesday.
Christensen also pointed out that no American had been named to DaimlerChrysler's management board since the 1998 merger - adding that the board, which controls many operations but doesn't hire or fire executives, will have 11 German members and one American member in January 2004 - and the American was on the board before the merger.
According to the report, Christensen also played excerpts from a 2000 interview by the Financial Times with DaimlerChrysler chairman Jurgen Schrempp in which Schrempp describes Chrysler as a "division" of Daimler and said the German-heavy management "was always the structure I wanted."
But, "no matter how many times, no matter how many ways Christensen says it, there was no fraud in this case," Jonathan Lerner, DaimlerChrysler's lawyer , responded.
The DaimlerChrysler merger was seen as a bail out for Chrysler, which was struggling in the late 'Nineties.
At the time of the merger, Kerkorian had no reservations, as he stood to make millions. Uncertain market conditions have delayed profitability though, and it seems Kerkorian, who made his billions from swashbuckling airline dealings and Nevada real estate, is getting nervous, like many other DaimlerChrysler investors. The lawsuit goes to court on Monday.
Original article from Car