Disgruntled shareholders of German pay TV operator Premiere have launched a lawsuit against the multi-channel platform for publishing what they say were falsified subscriber numbers and misrepresenting the state of the company under its previous management.
In October, Premiere execs admitted the feevee platform had nearly 1 million fewer subscribers than it had previously touted — 2.4 million instead of the 3.5 million reported in June.
Accompanying a stark profit warning, the admission caused Premiere’s share price to plummet. It also led to the resignation of Premiere’s chief financial officer, Alexander Teschner, just a month after the exit of former CEO Michael Boernicke, who was replaced by Mark Williams, News Corp.’s finance chief for Europe and Asia.
At the time, irate shareholders had threatened legal action, saying the feevee operator withheld information that would have had a direct impact on the company’s share price.
News Corp. took control of Premiere last year, suffering a major financial hit from its investment as the paybox’s share price plunged.
In its lawsuit, filed in Frankfurt’s regional court, the group of shareholders accuse Premiere of publishing false information in company literature prior to its 2005 initial public offering and again in 2007 for another share issuance.
Premiere’s management, installed last year after Rupert Murdoch began building up his stake in Premiere — currently at 29% — has been busy cleaning house and restructuring the company following the exit of Premiere’s former management. Critics hold former chief exec Georg Kofler, who stepped down in 2007, responsible for the misleading figures that at the time buoyed Premiere’s prospects and enticed investors.
Earlier this month, Premiere said it aimed to raise E411.6 million ($542.3 million) by issuing 367.5 million new shares for $1.47 each.
Premiere has seen its share price plummet 90% in the past year to its current price of $1.80.