Akzo steps up legal battle over La Seda

Source: ECN


AKZO IS taking action to resolve its long-running court wrangle over its former Spanish fibres subsidiary La Seda. It has initiated legal proceedings in a Barcelona court against the Spanish lawyer Soler Padro, alleging that he has failed to fulfil a promise made in respect of the 75.5% he controls of La Seda.

The legal action seeks to force Padro to transfer his stake into the control of the Catalan government or to hand over a proportion of his shares to existing minority shareholders in La Seda. Akzo sold its 57.5% stake to Padro for a nominal one peseta last year, but only on the understanding that he would comply with Spanish law and ultimately make a majority bid for the company.

Akzo's latest court action alleges that he has not done so within the maximum time provided and, significantly, is being backed up by talks it has had with the Catalan government.

An Akzo spokesman said that it has 'a guaranteed agreement in black and white' that all charges against it will be dropped if it can bring about a transfer of a majority stake in La Seda to government control.

The plan was announced in Barcelona this week by Akzo management board member Cees van Lede, who confirmed legal steps had already been taken to undo last July's agreement on the sale.

The Catalan government is making much of the fact that it last year agreed in principle to sell a majority in La Seda to Hualon of Taiwan. But Akzo's van Lede quoted Spanish sources saying the planned sale is not likely to go through.

He said he could not rule out the possibility that the Catalan government will ultimately return the stake to La Seda itself. Akzo has stressed however that it does not under any circumstances plan to reactivate its involvement in La Seda following the legal operation.

Van Lede said Akzo was not in the least concerned about losing any of the cases brought against it by unions and minor shareholders. But he noted that the string of lawsuits filed against it in the wake of the sale last year were damaging the group's international and Spanish reputation. He said Akzo has pledged to help La Seda, which remains in deep financial troubles.

Chairman Aarnout Louden, fellow directors Willem Meyberg and Peter Provo-Klaut and a former Akzo manager Udo Stark all testified before a Barcelona judge in April this year. The judge ordered a hearing to investigate union claims that the company failed to meet its responsibilities to the workforce when it sold its stake to Padro last year.