NEW YORK, Jan. 8, 2003 (PRIMEZONE) -- The law offices of Wechsler Harwood LLP today announced that a securities class action has been commenced on behalf of shareholders who purchased, converted, exchanged or otherwise acquired American Depository Receipts (ADRs) of Cable and Wireless PLC ("Cable & Wireless" or the "Company") (NYSE:CWP) between August 6, 1999 and December 6, 2002, inclusive (the "Class Period").
The case is pending against Cable & Wireless in the United States District Court for the Eastern District of Virginia. A copy of the complaint filed in this action is available from the Court, or can be viewed on Wechsler Harwood web site at: www.whesq.com
The complaint charges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of materially false and misleading statements to the market between August 6, 1999 and December 6, 2002. Specifically, the complaint alleges that defendant Cable issued a press release on August 6, 1999, announcing that it had agreed to sell One 2 One, a British based mobile telecommunications operator, to Deutsche Telekom. Under the announced terms of the agreement, Deutsche Telekom would pay 6.9 billion pounds sterling in cash for 100% of the equity ownership interest in One 2 One including the repayment of 237 million pounds of shareholder loans, and would assume approximately 1.5 billion pounds of third-party debt.
According to the complaint, such statements were materially false and misleading because they failed to disclose that a critical term of the One 2 One deal was a 1.5 billion pounds tax indemnification clause agreed to by Cable, and more specifically, a trigger clause, whereby a future downgrade of Cable's long-term debt rating below a predetermined threshold would trigger a 1.5 billion pounds cash obligation on behalf of Cable.
On December 6, 2002, Moody's investment service announced that it would downgrade the long-term debt rating of Cable from Baa1 to Baa2. Cable then shocked the market in a press release that same day stating that, as a consequence of the downgrade, the above mentioned "ratings trigger" was activated. The announcement caused the price of Cable's ADRs to fall by 40 percent in one business day, from a closing price of $3.90 per ADR on December 6, 2002, to close at $2.33 per ADR on December 9, 2002, on unusually high trading volume. Subsequently, the company filed a Form 6-K with the SEC on December 9, 2002 which included a statement regarding the tax indemnification "ratings trigger" clause.
No class has yet been certified in the above action. Until a class is certified, you are not represented by counsel unless you retain one. If you are a member of the Class, you may move the court no later than February 24, 2003 to serve as a lead plaintiff for the Class. In order to serve as a lead plaintiff, you must meet certain legal requirements. To be a member of the class you need not take any action at this time, and you may retain counsel of your choice.
Wechsler Harwood has taken a leading role in many important actions on behalf of defrauded shareholders. The Wechsler Harwood website (www.whesq.com) has more information about the firm and detailed information regarding this matter. If you wish to discuss this action with us, or have any questions concerning this notice or your rights and interests with regard to the case, please contact the following:
Wechsler Harwood LLP 488 Madison Avenue, 8th Floor New York, New York 10022 Toll Free Telephone: (877) 935-7400 David Leifer, Wechsler Harwood Shareholder Relations Department: dleifer@whesq.com extension-251
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca