MobilCom Shareholders Vote To Sue France Telecom

FRANKFURT, Germany (AP)--Shareholders of MobilCom AG (MOB.XE), one of Germany's cell phone providers, are to sue the company's biggest shareholder France Telecom SA (FTE).

MobilCom said its shareholders voted at the annual general meeting on Friday to sue France Telecom in a bid to seek damages from the rollout of third-generation, or 3G, mobile technology.

The decision came despite the board's recommendation that no legal action be taken.

"The board of directors and the supervisory board of MobilCom AG remain of the opinion that the damages claim sought by some shareholders against France Telecom is fruitless," the company said in a statement. "France Telecom has not inflicted any damage on Mobilcom."

Paris-based France Telecom stepped in and assumed EUR7 billion in MobilCom debt in 2002, forcing MobilCom founder Gerhard Schmid to step down and file for personal bankruptcy. France Telecom holds a 29.1% stake in Mobilcom.

Under the deal, MobilCom agreed to stop deployment of its third-generation networks, a move shareholders said has stymied the company's growth.

A call seeking comment from France Telecom wasn't immediately returned.

In other business, shareholders approved a share buyback plan and a 25% boost in dividends to EUR0.25 per share.

(END) Dow Jones Newswires"

Posted to the site on 24th April 2005