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Trial of TV brothers puts culture in dock

Discussion in 'Muppet Headlines' started by Phillip, Nov 4, 2002.

  1. Phillip

    Phillip Administrator Staff Member

    Trial of TV brothers puts culture in dock
    Courtesy of The Guardian

    For one investor in EM.TV, what's left is a plastic Kermit the Frog. Today the saga reaches court.

    Two brothers are due to appear in the dock of a Munich court today at the start of what many see as a trial of Germany's fledgling equity culture.

    Thomas and Florian Haffa oversaw one of the extraordinary boom-to-bust stories of recent years. Between 1997 and 2000, shares in their firm, EM.TV, rose 20,000% to a peak at which the company was worth more to the stock market than Lufthansa. Then they tilted into a crash that, within less than a year, had cost investors more than £5bn.

    In the first case of its kind in Germany, the two brothers stand accused of misleading their shareholders as to the true value of an enterprise which owns the Muppet show and a stake in Formula One motor racing. If found guilty, they face up to three years in jail or a fine as much as £1m.

    As a cautionary tale of financial life, it could scarcely be bettered. On one side, there is the perma-tanned, 50-year-old Thomas, a former salesman renowned as much for the glittering parties he threw aboard his 115-foot yacht as for his supposed financial genius.

    On the other side, those like Renate Allgaier, aged 57, a part-time secretary from Ottobrun near Munich, who ploughed her entire personal savings into EM.TV.

    "I've lost 15,000 marks (almost £5,000). I feel tricked," she said.

    Or those such as Jörg Bortenschlager, 27, from Geisenfeld, also in Bavaria, who describes himself as an "ex-millionaire". "All I have left from EM.TV are promotional gifts like [my plastic model of] Kermit the Frog," he told the Sunday tabloid Bild am Sonntag.

    After the crash, some 500 shareholders banded together to press for compensation before their cause was taken up by the state. While the story of EM.TV has much to say about the inadequate oversight of Frankfurt's now-defunct Neue Markt, it has also shown up an awesome degree of reckless innocence in a country where bonds, rather than shares, were until recently the security of preference for small investors.

    The charges laid by the state go back to September 2000 when EM.TV reported wildly inaccurate figures. When they were corrected the following month, Florian, now 37, resigned as chief financial executive.

    Three months later, the company disclosed debts of almost £800m in a shock profit warning.

    The Haffas' lawyers are expected to argue that EM.TV's stock market valuation had fallen sharply even before September 2000.

    At the root of the company's problems is the shopping spree in which Thomas netted the Jim Henson company, owner of the Muppets, and a half-share in Bernie Ecclestone's Formula One holding.

    The prices paid were stratospheric. But then the purchases were funded, in large part, with EM.TV's own astronomically-priced shares.

    Thomas, who still owns 17.5 per cent of EM.TV resigned as chief executive officer in the summer of 2001.

  2. Drtooth

    Drtooth Well-Known Member

    Hmmmmm.... The E in EMTV wouldn't stand for Enron, would it?
  3. Phillip

    Phillip Administrator Staff Member

    Here's another article with a few photos... Look at the caption under Miss Piggy. It says, "The Haffas are the men behind the Muppets." Doesn't that make you sick?


    Court humbling for Germany's fallen star
    Courtesy of BBC News

    Two brothers who founded and ran EM.TV, briefly one of Germany's most fashionable media companies, have denied charges of falsification of accounts.

    Thomas Haffa, who stepped down as chief executive last year, and his brother Florian, the former finance chief, are standing trial in Munich, accused of manipulating the company's share price.

    The EM.TV trial is the focus of enormous attention in Germany, where it is seen as the comeuppance for the former stars of the Neuer Markt, the high-growth stock market which is to be closed after the tech sector's collapse.

    EM.TV garnered enormous publicity with a series of splashy deals such as the purchase of the Jim Henson Company, owner of the Muppets.

    But it built up debt in the process, plunged into a $1.4bn (£895m) loss in 2000, and saw its share price fall from 110 euros in February 2000 to less than 1 euro today.

    High hopes

    The publicity froth that surrounded the company during the late 1990s is now at the centre of the current trial.

    Munich prosecutors allege that the Haffa brothers painted too rosy a picture of the firm's finances in interviews and speeches in late 2000, and reiterated earnings targets that they knew were out of reach.

    At the height of the firm's success, the Haffa brothers said they were on their way to creating something to rival the US Disney corporation.

    In mid-November 2000, Thomas Haffa said the firm was on course to make more than $300m that year, a figure he corrected down to less than $25m two weeks later.

    Impossible prediction

    In court on Monday, both brothers denied any wrongdoing.

    Thomas Haffa argued that the violent ups and downs of the media licensing business made any sort of long-term prediction highly risky.

    "With one single big contract we could still have reached the earnings target," he said.

    "It was never my intention to mislead my shareholders."

    Anyone's guess

    Few are confident in predicting an outcome to the trial, since this is the first such case in German corporate history.

    But it may not be the last - court cases could result from the recent disintegration of the much larger Kirch media empire, also based in Munich, and shareholders are furious about massive price falls at many Neuer Markt firms.

    If convicted, the brothers could face up to three years in prison.

    The trial is expected to last until at least January.
  4. Fozzie Bear

    Fozzie Bear Well-Known Member

    I'm currently leaning over the toilet to puke my guts out. Muley and my rubber chicken are joining me as well.

    Seems a news reporter would get their information straight before telling it...Haffas, behind the Muppets?

    They forgot to add "The Haffas are the men behind the Muppet's current demise."
  5. frogboy4

    frogboy4 Inactive Member

    That does make me angry. Hey, who is curious about the Kermit model?
  6. Luke

    Luke Well-Known Member

    Thats what i was thinking - they didn't give me no Kermit model !!!! :rolleyes:
  7. Fozzie Bear

    Fozzie Bear Well-Known Member

    OH! I WANT ONE!!
  8. Drtooth

    Drtooth Well-Known Member

    The only satisfaction in this escapade is that EMTV is going under like a garbage bag full of Anvils!

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