Oracle CEO in lawsuit spotlight over failure to turn over evidence

Oracle Corp CEO Larry Ellison may well find himself in a legal soup after a federal judge ruled that the flamboyant billionaire had deliberately destroyed or withheld e-mails and failed to preserve tape recordings that should have been turned over to lawyers for shareholders suing him.

The suit seeks damages on behalf of Oracle shareholders who held the stock when it fell after the company reported disappointing results in 2001.

On Tuesday US District Judge Susan Illston in San Francisco said that the e-mails, as well as recordings of interviews for a book about Oracle founder Ellison called ''Softwar,'' were willfully withheld. Ellison and Oracle knew the material was potentially relevant to claims that they made false statements about the company's 2001 second-quarter financial results and problems with a software product, Illston said.

Ellison, the fourth-richest man in America, has drawn criticism from some shareholders for a $72 million pay package that's 12 times bigger than the median pay of CEOs in the technology industry.

In the lawsuit, shareholders allege that the world's second-largest software company improperly booked millions of dollars of additional sales in the second quarter of 2001 and covered up problems with its Suite 11i database product. The suit claims that Ellison knew about the problems and sold about $900 million of shares he owned in the group before they were disclosed to investors.

Accordingly, Ellison turned over 15 e-mails and another 1,650 of his e-mails from the files of other Oracle employees were turned over, according to Illston's ruling. Ellison and Oracle had a duty to preserve his e-mails after the litigation was filed in March 2001. Many missing e-mails were from after that date, Illston said.