US court finds Vivendi guilty in shareholders lawsuit

French media and telecom giant, Vivendi will face million in dollars in damages after a US federal court found it guilty late last week of misleading shareholders on the company's financial status in 2000 and 2002 when the company's went on an acquisition spree that saw its stock losing 90 per cent of their value.

Vivendi was found guilty by a jury in the US District Court in Manhattan in a class-action suit on all 57 counts on misleading shareholders about the company's financial health during the period October 2000 and August 2002, when the company's went on an acquisition spree that saw its stock losing 90 per cent of its value.

In the two-year period, Vivendi, the Paris-based media and telecommunication conglomerate spent around $77 billion in a three-way merger with French television group Canal+ and Canadian company Seagram, the owner of Universal Studios.

Jean-Marie Messier,  chief executive

The court however found Jean-Marie Messier, the chief executive at the time and Guillaume Hannezo, the chief financial officer, who were defendants in the case, not guilty.

The court did not fix any damages, for which another date will be set, but attorneys for the shareholders say they expect the court to award around $9 billion if the over 1 million shareholders file a claim.

Shareholders of Vivendi from France, the UK, the US and the Netherlands said the company did not reveal its financial problems from 2000 and 2002 as the one-time water utility firm that emerged from bankruptcy and went on to become a media and telecommunication conglomerate through acquisitions, was left saddled with a $77-billion debt.