PwC settles investors' claims over E-District

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The Independent Online

An out-of-court settlement has been reached over the multi-million pound action brought by shareholders against Pricewaterhouse-Coopers as accountants for the flotation of E-District, the AIM-listed internet company now called YooMedia.

YooMedia's activities include online gambling and dating.

The case was due to go to the High Court in June, but the action arose from one of the last listings of the boom in 2000.

E-District sought an AIM listing and issued a prospectus that, unlike many other internet companies, gave a picture of an enterprise that had a successful trading history and was being run at a profit. This was not the true picture, which emerged almost a year later. The turnover figures had been falsely inflated by a factor of 8, showing a profit of £80,000 while the company had actually suffered a loss of £380,000. Debtors and net assets were also inflated.

Some 110 private and institutional shareholders were suing PwC as both auditors and the "reporting accountants" that put their name to the company's prospectus prepared for the £150m initial public offering. They argued that, had the true financial figures been known, the shares would have been worthless. The terms of the settlement were not disclosed.

David Greene, of the shareholders' solicitors Edwin Coe, said: "It is certainly pleasing to draw a line under this incident, in which investors were duped. E-District was certainly not the first of such events and may not be the last."

A spokesperson for PwC said: ""We can confirm that a settlement acceptable to all the parties was reached."