International law firm to probe MultiChoice claims
International law firm Pomerantz has announced it is investigating claims that MultiChoice was involved in securities fraud or unlawful business practices relating to payments to Gupta-owned ANN7, according to a TimesLIVE report. Pomerantz said the claims were being investigated on behalf of investors‚ who could contact Robert Willoughby at the firm.
‘According to local media‚ citing leaked e-mails‚ MultiChoice substantially increased its annual payment to ANN7 from R50m to R141m over the past two years,’ a statement from the firm read. MultiChoice and its former chief executive have denied any wrongdoing.
The Pomerantz probe could result in the firm launching a class action lawsuit against Naspers, MultiChoice's holding company, suggests a Moneyweb report. Pomerantz, with offices in New York, Chicago, Los Angeles and Paris, is active in the areas of corporate, securities, and antitrust class litigation. Recent securities litigation includes cases against AOL TimeWarner, Avid Technology, Lucent, Groupon and Tesla.
The firm appears to have pioneered the field of securities class actions, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct and has recovered over $1bn on their behalf, says the report. Naspers investors have been invited to express interest in joining the class action.
Pomerantz has been described by some US-based investors as the corporate equivalent of an ambulance chaser, according to a BusinessLIVE report. It pioneered corporate class actions and has been involved in many high-profile cases. ‘They’re not always successful but these are people you don’t really want looking into your business,’ said an analyst. The firm did not respond to queries about the level of support it had received, says BusinessLIVE. It points out that in its statement, Pomerantz referred to MultiChoice’s decision to initiate a probe into whether improper payments were made to television station ANN7. There was no reference to MultiChoice’s payments to the SABC. Although Naspers is listed on the JSE and does not have a secondary listing on any other market, the US firm is able to contemplate action on the basis of Naspers’ American Depositary Receipts (ADRs). Pomerantz said these fell 5.6% on 1 December. It is unclear whether the action is restricted to holders of Naspers’s ADRs or is accessible to all shareholders, notes the report. Naspers spokesperson Meloy Horn reportedly said this type of release from law firms was not uncommon in the US following announcements related to listed entities. ‘They don’t mean any legal proceedings are under way or will happen, and we have not been informed of any legal action from any of our investors,’ she said.
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