US firms Milberg Weiss Bershad Hynes & Lerach and Scott+Scott said yesterday that the suit was filed a week ago and is pending in a New York district court. The suit alleges that Vodafone’s senior management issued “a series of material misrepresentations” to the market highlighting “the company’s strong financial performance” between 7th March 2001 and 28th May 2002, in order to artificially inflate the price of Vodafone securities.
The shareholders claim that Vodafone misrepresented, or failed to disclose that it delayed the write-down of billions of dollars of goodwill and impaired assets and that it “grossly overpaid for the numerous acquisitions” it had made in prior years.
Vodafone, which posted a £13.5 billion pre-tax loss for the financial year ending 31st March, 2002, faces a class action lawsuit. This means that anyone who bought Vodafone shares between March 2001 and May 2002 can join the class action in an attempt to seek damages.