HomeInsightsVivendi accuses T-Mobile of fraud and racketeering

    Vivendi accuses T-Mobile of fraud and racketeering


    Seeks $7.5 billion damages in PTC share ownership dispute

    Vivendi has taken its long-running battle with T-Mobile, and its ex-joint venture partner Elektrim, up a level by filing a Racketeer Influenced and Corrupt Organizations Act (RICO) complaint in federal court in the State of Washington, which, if it is successful, could see T-Mobile paying Vivendi $7.5 billion.

    Vivendi is claiming that T-Mobile has stolen its $2.5 billion investment in Polska Telefonia Cyfrowa (PTC), through a pattern of fraud and racketeering. It is also claiming that by using US communications infrastructure to plan and enact the alleged conspiracy, there have been offences committed within the US, making the Seattle filing relevant.

    Named in the complaint are T-Mobile USA, Inc., T-Mobile Deutschland Gmbh, Deutsche Telekom AG and Mr. Zygmunt Solorz-Zak, who controls Elektrim S.A, which is Vivendi’s joint-venture partner for its investment in PTC.

    Jean-Bernard Lévy, Chairman and ceo of the company, said today that T-Mobile had “induced” Elektrim to “betray us, to help T-Mobile take over Vivendi’s $2.5 billion investment in PTC.

    He said that T-Mobile induced Mr Solorz to cross over in the “darkness of night and to join forces” with it. Then the companies had corruptly and physically taken control of the assets, changed the titles of the business in a “sham” board meeting,” falsified the PTC share registry, and then together had gone to a Polish court to endorse their actions, whilst explicitly excluding Vivendi from having any voice at all in the courtroom.

    Levy said that Vivendi had tried to reach a negotiated settlement with T-Mobile in the past, and had come close to agreement, only to see the operator walk away at the last minute. On one occasion in summer 2004 Vivendi thought it had succeeded in a deal that would see T-Mobile pay Vivendi $1.3 billion to end the dispute. Indeed, according to Vivendi, Deutsche Telekom’s cfo told Vivendi’s cfo to put the champagne in the fridge. But a few days later Vivendi received a two line letter cancelling negotiations, with no explanations given.

    “Why did they do that?” he asked. “Events after that letter led us to the conclusion that there was a conspiracy between DT and Mr Solorz and that’s spelt out on the complaint in the form of the allegations we’ve made and we expect to be able to prove”

    Vivendi’s case is that T-Mobile has committed fraud in the US, using US telco facilities, and that that fraud was to take over PTC. Their lawyer  stressed that at the moment these were only allegations, but he believed they were provable.

    Under a RICO complaint the compensation due can be three times damages, hence the potential $7.5 billion figure due if Vivendi wins its action.

    Mobile Europe is currently waiting for a response from Deutsche Telekom to the most recent allegations.