Subject: [NEXTEL-1] Investigators probe MobilCom founder

From: Marcel <[email-masked]>
Date: Mon, 13 Jan 2003 13:56:51 -0500

Investigators probe MobilCom founder

MobilCom built up massive debts during the boom years
German prosecutors are investigating Gerhard
Schmid, founder of the troubled telecoms
company MobilCom, over a the gift to his wife
of 71m euros (£46.8m; $75.1m) in stock
options.

Kiel state prosecutor Uwe Wick said he was
investigating the payment of stock options to
Sybille Schmid-Sindran in 2001.

Mr Schmid, who was sacked as MobilCom
chairman in June, was forced in November to
put his holding in the company into a trust.

The deal cleared the way for a bail-out by
majority shareholder France Telecom to
proceed, and was a condition of a 162m euro
short term loan by the German government.

The latest revelation could put the bail-out in
doubt.

Trust nobody

Last week, Mr Schmid said he would appoint a
new trustee to oversee the couple's 42.4%
stake in the company.

But transferring control to another trustee
would be contrary to the terms of the
contracts underpinning the bail-out.

The relationship between France Telecom and
the Schmids are already strained over the
stock options payment, which it said was
illegal and started legal proceedings to recover
in August 2001.

France Telecom has taken over about 6bn
euros in bank loans and waived a further 1bn
euros of debt.

MobilCom ran up heavy debts because of its
third generation (3G) mobile phone networks.

MobilCom serves roughly 5 million German
customers, but is dwarfed by its rivals
Vodafone and Deutsche Telekom.

http://news.bbc.co.uk/1/hi/business/2652535.stm

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