DT claims Vivendi litigation impeded PTC development; seeks EUR3.5b in redress

5 Sep 2007

According to the Financial Times, Deutsche Telekom is demanding EUR3.5 billion (USD4.76 billion) from a joint venture controlled by France’s Vivendi, claiming the media group impeded the development of Polska Telefonia Cyfrowa (PTC), the Polish cellco at the centre of a long-running dispute between the pair. Vivendi and Deutsche Telekom have been battling in courts in Europe and the US over ownership of a 48% stake in PTC; the French company maintains the shareholding belongs to Telco, a joint venture between itself and Elektrim, a Polish conglomerate that declared bankruptcy last month. However, Deutsche Telekom, whose ownership of a separate 49% stake in PTC is unchallenged, feels its claim to the disputed shares has already been vindicated. It now fully consolidates PTC in its accounts while Vivendi has reduced the balance sheet value of its own investment to zero.

In a letter dated 28 August, Deutsche Telekom has reportedly demanded EUR3.5 billion in compensation from Telco. A Deutsche Telekom spokesman claimed that the value of PTC had been compromised by Telco’s numerous legal challenges. ‘We reserve the right to take legal action if our request is ignored,’ the spokesman said. Vivendi, which disclosed the compensation demand in its half-year accounts, said Telco considered the allegations to be ‘without any merit’ and that it intended to fight them.