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Vivendi, the French media company, filed a civil suit under the Racketeer Influenced and Corrupt Organisations Act against Deutsche Telekom’s T-Mobile USA mobile phone unit, accusing the German group of wire fraud and conspiracy.
The unusual move is the latest twist in a long-running dispute between Vivendi and T-Mobile over Vivendi’s investment in Polska Telefonia Cyfrowa, one of Poland’s leading telecommunications companies.
The suit claims that T-Mobile illegally appropriated Vivendi’s $2.5bn investment PTC through a pattern of fraud and racketeering. The Vivendi complaint, brought under a law traditionally used against organised crime in the US, was filed in federal court in Seattle, Washington, where T-Mobile USA is based.
Jean-Bernard Lévy, Vivendi chief executive, told reporters that the French company had filed the suit in an effort to force T-Mobile to finally resolve the dispute between the two groups.
Rico is increasingly being used by foreign plaintiffs to pursue US companies in US courts. The losing party in a Rico suit can face triple damages.
Named in the complaint are T-Mobile USA, T-Mobile Deutschland, Deutsche Telekom and Zygmunt Solorz-Zak, who controls Polish company Elektrim, which was Vivendi’s joint-venture partner for its investment in PTC.
Lawyers representing Vivendi defended the decision to bring the case in the US, where they said both Vivendi and T-Mobile had substantial business activities, and accused T-Mobile executives of colluding with Mr Solorz-Zak “in a pattern of racketeering activity over US wires as part of an unlawful scheme to take over an enterprise, PTC, and corrupt another enterprise, Elektrim”.
“Vivendi considers that T-Mobile and Mr Solorz-Zak’s Elektrim illegally appropriated its $2.5bn investment in PTC and, at every turn, have defied court orders. By filing this Rico complaint, Vivendi asks the court for a simple remedy: give us back our money or our PTC shares. Fairness and justice must prevail,” said Mr Lévy.
Ownership of the stake in PTC, eastern Europe’s second-largest mobile carrier with 10m customers, has been the subject of a long-standing legal battle between Deutsche Telekom and Vivendi, which controls French mobile phone group SFR.
Yesterday Deutsche Telekom described Vivendi’s claims as “absurd and nonsensical accusations …that are far removed from reality”. The German carrier said the latest accusations “join a whole list of other accusations that seem to have the objective to discredit Deutsche Telekom.”Elektrim said that the company could not comment on the specifics of the case until it had seen Vivendi’s suit.
Vivendi said in a statement that it filed a complaint under the Racketeer Influenced and Corrupt Organisations Act in a federal court in the state of Washington on Monday night, charging that T-Mobile had illegally appropriated Vivendi’s $2.5bn investment in one of Poland’s leading telecommunications companies, PTC.
Deutsche Telekom could not be immediately reached for comment.
The German group earlier this month agreed to buy Elektrim’s stake in PTC for €600m ($753m). Ownership of the stake in eastern Europe’s second-largest mobile phone operator has been the subject of a long-standing legal battle between Deutsche Telekom, Europe’s biggest telecoms group by sales, and Vivendi, which controls French mobile phone group SFR.
The dispute centres around whether Deutsche Telekom has the right to exercise a call option over a 48 percent stake in PTC.
Vivendi says Elektrim cannot sell the stake, arguing that it does not belong to Elektrim, but to Elektrim Telekomunikacja, a holding company in which both Elektrim and Vivendi have a stake.
But in June, an arbitration court in Vienna said Elektrim could sell the stake to Deutsche Telekom, giving the German telecoms group control over 97 percent of PTC, which has 10m customers.
Earlier this month, Vivendi filed a criminal complaint in Warsaw against Deutsche Telekom and Elektrim.
Vivendi said that complaint was to protect its rights as a creditor in the framework of the bankruptcy proceedings of Elektrim and to prevent any transfer of PTC shares.
The complaint filed in the U.S. court on Monday named T-Mobile USA, T-Mobile Deutschland, Deutsche Telekom and Zygmunt Solorz-Zak, who controls Elektrim.
“By filing this Racketeer Influenced and Corrupt Organisations Act complaint, Vivendi asks the court for a simple remedy: give us back our money or our PTC shares. Fairness and justice must prevail,” Jean-Bernard Levy, Viviendi chief executive, said in a statement.