Newspaper article The Evening Standard (London, England)

Fraud Charges Ground German TV's High-Flyers

Newspaper article The Evening Standard (London, England)

Fraud Charges Ground German TV's High-Flyers

Article excerpt


THE high-rolling founders of the German company that owns the rights to The Muppets are now starring in a Munich court on fraud charges.

The Haffa Brothers are fast becoming a cautionary tale for new-economy hubris. Just a few years ago, they were highflying symbols of Germany's flourishing new economy.

Thomas Haffa and his younger brother Florian founded EM.TV, a company listed on the Neuer Markt that gained international clout after purchasing the rights to productions such as The Muppet Show, Sesame Street and Formula One car racing.

The pair were eagerly photographed by business and celebrity magazines.

Now they are charged with defrauding shareholders.

The extent of their fall has been apparent in their trial during the past week, where the once-celebrated men have been booed by courtroom observers.

During the new-economy boom years, EM.TV was a darling of the Neuer Markt, which was seen as Germany's answer to Nasdaq. But as the fortunes of EM.TV and other firms began to dry up, so did those of the Neuer Markt, which closed down in September. EM.TV shares have fallen from a high of e110 in 2002 to less than e1 today.

Munich's public prosecutor has accused former chief executive Thomas and Florian, who served as EM.TV's chief financial officer, of cooking the books and making falsely optimistic statements in order to shore up the company's sagging share price.

The executives are also accused of concealing millions in losses while continuing to paint a rosy picture of the company. In 2000, Thomas Haffa promised shareholders a yearend profit of more than Dm600 million or e310 million (pound sterling197 million). In the end, the company posted a Dm2.8 billion loss.

Haffa has become the first manager of a Neuer Markt company to face charges in court for falsifying a revenue report and deceiving shareholders. …

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