Deutsche Telekom faces a setback in a long-running court battle over the information it provided for its flotation in the 1990s.
A report commissioned by prosecutors in Bonn has concluded that the former telecoms monopoly overvalued its real estate assets by about 2.8 billion Deutsche marks (€1.4 billion) when the former post and telecommunications ministry was converted into a company. The total assets were initially valued at 13 billion Deutsche marks.
The Deutsche Telekom IPO was the biggest offering in German history and was seen at the time as an effort to develop an Anglo-Saxon shareholder culture in the country. It attracted significant interest from Irish investors.
The findings of the prosecutors' report open the possibility of a formal indictment being made against managers and auditors of the company.
The prosecutor in Bonn, where Deutsche Telekom has its head offices, has been investigating claims the company overstated the value of its vast real estate assets in the prospectus for potential investors prior to the IPO.
The report is the last step before the investigation is closed. The prosecutor has to decide whether to bring an action. The results are also relevant for a civil action against Deutsche Telekom, in which thousands of shareholders are suing for compensation.
