Former Berkshire executive denies wrongdoing in Lubrizol deal

31 March 2011 20:04  [Source: ICIS news]

HOUSTON (ICIS)--A former executive at Berkshire Hathaway denied that he did anything wrong when he recommended that Berkshire acquire Lubrizol after he bought stock in the company, he said on Thursday.

"I don't believe I did anything wrong," said David Sokol, former CEO of NetJets, a company owned by Berkshire Hathaway.

Sokol made his comments during an interview with CNBC.

Early in January, Sokol bought 96,060 shares in Lubrizol, before he recommended to Warren Buffet, the chief executive of Berkshire, according to a statement released by Buffett.

Sokol mentioned that he owned Lubrizol stock when he first talked about the company with Buffett, the statement said.

In the letter, Buffett stressed that Sokol did not know how either Buffett or Lubrizol would react to such a proposition, the statement said.

"Furthermore, he knew he would have no voice in Berkshire's decision once he suggested the idea," Buffett said. He added that Sokol did nothing unlawful.

In mid March, Lubrizol announced that it would be acquired by Berkshire Hathaway for $9.7bn (€6.9bn).

The subsequent rise in Lubrizol's stock price increased Sokol's holdings by about $3m, CNBC reported.

On Monday, Sokol gave Buffett his resignation letter.

Sokol wanted to resign so he could spend more time concentrating on his family's investments, Buffett said in his statement. Sokol told Buffett that the Lubrizol stock was not a factor in his decision.

Lubrizol makes lubricant additives.

($1 = €0.71)

By: Al Greenwood
+1 713 525 2645

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