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.
All along, World Online has insisted that Brink’s
arrangement was perfectly legal, a proposition
that it may now have to prove in court.
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.