Shareholders file class suit against Deutsche Telekom

A class-action lawsuit against Deutsche Telekom opened this week through which thousands of disgruntled shareholders are seeking up to €80 million (US$126 million) compensation from the German telecom giant, an Associated Press report said. Some 16,000 shareholders are seeking compensation for what they claim were lies regarding the company's third initial public offering tranche in June 2000.

One of the complaints is that at the time of the offering, Bonn-based Deutsche Telekom, Europe's biggest telecom operator, had already started negotiations with US mobile phone company Voicestream, now T-Mobile USA, the report said.

Telekom bought Voicestream in 2001 for about €34 billion in a move highly criticised at the time. The unit has since become a key driver of growth.

Another complaint is that the value of some of Telecom's real estate assets had been inflated in pamphlets sent to shareholders before the offering.

The case breaks new ground in Germany, where legislation allowing class-action suits to go before a court only came into play in 2005.

Several high profile witnesses are being called, including the former CEO Ron Sommer, who is to testify on 14 April.

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