MobilCom seeks £45m from firm controlled by founder's wife

Liz Vaughan-Adams
Friday 27 December 2013 04:34
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The troubled German mobile phone company MobilCom yesterday said it was suing Millennium, a company controlled by the wife of its founder and former chief executive Gerhard Schmid.

The company, which is locked in rescue refinancing talks with its 28.5 per cent shareholder France Telecom, said it was suing Millennium, which owns 10.2 per cent of MobilCom, for €70.9m (£45.3m).

Under Mr Schmid's leadership, MobilCom lent Millennium, which is controlled by his wife Sybille Schmid-Sindram, €70.9m which it alleges had been used in connection with a share option programme for MobilCom.

But Mr Schmid, who is understood to have agreed to pay back that loan after he was ousted from the company in June, has still not stumped up the cash. Mr Schmid, along with his wife, control about 50 per cent of MobilCom's shares.

Furthermore, MobilCom claimed Millennium and Mr Schmid had "violated several laws in connection with the company's share option programme" and had demanded Millennium annul the scheme. "This has not yet happened. MobilCom has declared the contract null and void and is demanding the repayment of €70.9m," the company said.

"The decision to sue Millennium was made in the light of Millennium's and Gerhard Schmid's multiple violations of laws. There are strong grounds that the company has unjustly enriched itself," it said, adding MobilCom reserved the right "to make further claims for damages against Gerhard Schmid and Millennium".

The move is the latest in the dispute between Mr Schmid and France Telecom. They have yet to agree on a refinancing deal that will save MobilCom.

MobilCom also said yesterday it was calling an extraordinary general meeting, at Millennium's request.

Separately, MobilCom's financial results for the second quarter of the year were leaked to newswires. Its losses swelled to €172.8m in the period compared with a loss of €27.9m in the same period a year before. Sales in the quarter fell to €520m from €669.5m a year before.

Earlier this month, the company said it would have to delay publishing its first-half results to give it extra time to account for the fall in value of acquisitions. The figures are due out today.

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