Tiscali 2008 Annual Report Download - page 147

Mobistar however opposed this early termination.
Subsequently, Tiscali Belgium sold Wanadoo Belgium to
Scarlet. On the basis of the contract for the sale of the
Wanadoo Belgium shares by Tiscali Belgium to Scarlet, Tiscali
is responsible vis-à-vis Scarlet for Mobistar claims with
reference to the termination of the Contract.
Tiscali has brought before the courts (i) Wanadoo SA –
responsible in accordance with the contract for the sale of the
Wanadoo Belgium shares to Tiscali Belgium, (ii) the legal
advisors for the purchase transaction – who issued an
erroneous opinion on the possibility of terminating the Contract
- and (iii) the respective insurance company.
The
petitum amounts to € 4 million, nevertheless Tiscali believes
that the same should be reduced (i) by around € 1 million on the
basis of the correct interpretation of the Contract, (ii) by a further
amount, since the summons before the court of Wanadoo and
the legal advisors by Tiscali should at least minimize the profile
of responsibility of the latter. During this initial stage of the
proceedings, Tiscali believes that it is in no way responsible;
however, given the complexity of the dispute and the number of
parties involved, a forecast with regards to the possible outcome
emerges as complex. Despite the fact that the possibility of
reaching an agreement on the dispute has been outlined,
involving the payment of approximately EUR 400,000, Tiscali
intends to hold out in the court case, unless the negotiations
currently underway conclude favourably. In the financial
statements at 30 September 2007, Tiscali International BV had
not set aside provisions.
Ecotel communication AG/Tiscali
On 19 October 2007, Ecotel Communication AG (Ecotel) - the
company to which the Tiscali Group during the first half of
2007 transferred its German B2B activities for around EUR
18.5 million - sent Tiscali a letter by means of which – in
relation to the purchase/sale contract stipulated with Tiscali
Business GmbH on 3 February 2007 and signed by Tiscali in
its capacity as guarantor – it challenged the company that
certain income values pertaining to the activities acquired were
not correctly represented during the negotiations and in the
related purchase agreement and requested the Company to
launch an independent appraisal into these values. Therefore,
as a consequence of the alleged deviation from the real values,
Ecotel Communication AG assumes that it has suffered a loss
during its activities, whose effective total it estimates as coming
to at least EUR 15 million. The Company has fully disputed
the contents of the letters.
In agreement with the arbitration clause present in the contract
for the sale of the German activities, on 21 April 2008 Ecotel
launched arbitration proceedings, summoning Tiscali Business
Gmbh and Tiscali as jointly and severally bound. Ecotel
requests compensation for the damages suffered estimated as
totalling EUR 15.2 million plus any additional damages and
other related charges. Tiscali and Tiscali Business Gmbh have
made their statement of action, disputing the charges. The
arbitration proceedings will take place in Frankfurt (Germany)
and are estimated to last around 24 months. The Company
deems Ecotel Communication AG’s requests to be lacking
grounds, therefore the Company has not made any provision in
the financial statements for this dispute.
Tax assessments
The Dutch tax authorities forwarded World On Line International
NV (and the direct subsidiary Tiscali International BV) a number
of notices of assessment concerning the alleged non-payment of
withholdings on remuneration and stock options acknowledged
in previous years to Group executives. The total amount of these
disputes is EUR 2 million, against which Tiscali International BV
has made payments totalling around EUR 0.3 million. The
residual amount mainly refers to stock options which are alleged
to have been granted to Mr. Landefeld (a party what is more
resident for tax purposes in Germany) and, in the opinion of
Tiscali’s tax advisors, not subject to taxation on the Netherlands.
Given this circumstance and considering that this dispute is in
the initial stages, it was decided that the liability cannot be
considered likely and therefore no related provision was made.
TISCALI S.P.A. – FINANCIAL STATEMENTS AND EXPLANATORY NOTES
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