New DeLorean lawsuit

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The Independent Online
Arthur Andersen, the world's biggest accounting firm, is being sued by the British Government in a New York state court for alleged fraud and negligence over its audit of the defunct DeLorean Motor Co. The Government seeks hundreds of millions of dollars in damages in suits naming Andersen's US, UK and Irish offices.

Last month a New York federal court dismissed the Government's federal law claims against the company on the grounds that key transactions involved in the case weren't covered by US securities laws and that the British Government probably knew the high risk of investing in a DeLorean project in Northern Ireland. It allowed the Government to refile fraud and mismanagement claims in a state court.

The Government and the DeLorean trustee sued Andersen in 1985 and 1984, respectively, alleging that Andersen auditors were negligent and helped DeLorean provide false financial statements to the British Government.

The DeLorean Motor Co was founded in 1975 to build the 12- cylinder, gull-winged, stainless-steel DMC-12 sports car. The company filed for Chapter 11 bankruptcy protection in 1982 amid allegations of mismanagement and fraud against Chairman John DeLorean and others. DeLorean was indicted by a federal grand jury in 1985 on fraud and racketeering charges, and later acquitted.

Time bandits

Most company directors oppose the EU Working Time Directive, according to a survey from the Institute of Directors to be published tomorrow.

Nearly three-quarters of 700 respondents said they would apply for an opt-out from the directive, which limits workers to a 48-hour week and specifies daily rest breaks and holiday entitlement.

Russia-Iraq oil deal

Russian Energy Minister Pyotr Rodionov announced in Baghdad that Iraq and Russia may shortly sign an agreement valued at almost $3.8bn (pounds 2.4bn) for the second phase of development of Qurnah, a major Iraqi oilfield, according to Interfax reports. The agreement could breach the six-year- old UN oil embargo on Iraq, imposed after the 1990 invasion of Kuwait.

Root problem

Cadbury Schweppes' beverage division is being sued in the US by Coca- Cola Bottling New York, which is the third-largest US bottler of Coca- Cola brands, after Cadbury told the bottler it was taking away the licence to sell A&W Root Beer from next month.

The bottler will continue to distribute other Cadbury beverages, such as Dr Pepper and Sunkist orange soda. It is also preparing to sell Coca- Cola's Barq's brand of root beer.

The relationship between Cadbury and Coca-Cola bottlers in the US suffered a blow last year after Coca-Cola Enterprises - the largest US distributor of Coca-Cola brands - stopped distributing several Cadbury sodas. That came after Coca-Cola acquired Barq's root beer and Minute Maid drinks. Cadbury declined to comment on the action.

Beatrice to marry

The Italian dairy company Parmalat said it will acquire Beatrice Foods of Canada in a purchase valued at about C$290m (pounds 349m).

The acquisition will be financed by the Canadian company's cash flow and by a loan from Citicorp. Parmalat will pay C$230m for 75.1 per cent of Beatrice, while Citicorp will pay the remainder for 24.9 per cent, which it eventually will sell in an initial public offering. Parmalat will own 100 per cent of the company's voting rights.

Beatrice gives Parmalat a 17 per cent share of Canada's milk market, control of 20 factories in Canada and three in the US, and will boost the company's total sales to more than $4.4 bn in 1997.

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