World Online May be Sued by Its Own Investors
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If it has been a bad week for Microsoft, it is becoming a terrible week for Dutch Internet company World Online, which, according to a newspaper report, is to be sued -- not by its own government -- but by its own shareholders.
De Volkskrant, a daily newspaper of The Netherlands, reported Wednesday that a group of investors plans to sue Chairwoman Nina Brink, ABN Amro Rothschild and Goldman, Sachs & Co. for concealing pertinent information about Nina Brink's share dealings in the company.
News of the possible legal action -- and of discussions with well-known criminal lawyer Gerard Spong -- triggered a further fall in World Online International NV shares of 21 per cent. The shares were trading 68 percent off their initial price at one stage on Wednesday morning.
At the heart of the row is an unusual arrangement made by World Online founder Nina Brink, who sold most of her stake in the company before its recent flotation. In a private deal with American equity firm Baystar Capital she still stood to profit if the shares in the company rose.
The Dutch investors' revolt is another indication that Europeans are unwilling to take Internet losses lying down, as was shown recently when investors in the U.K's lastminute.com put stop-payments on their checks after learning that they would receive only 35 shares each. Some of them still got the shares plus the refund -- the only ones to make a handsome profit on the deal.
Like the lastminute.com debacle, the World Online case will hinge upon late changes in the information issued to investors. Crucial differences between the preliminary and final prospectuses were certain to mislead investors, say those who are considering the action.
Brink remains in charge at World Online, which made no comment about Wednesday's developments.