Fiorina grilled over key conversation
Published: 26 Apr 2002 07:32 BST
In a surprise move, an attorney for Walter Hewlett called Hewlett-Packard chief executive Carly Fiorina back to the witness stand on Thursday over the transcript of a conference call between HP and Deutsche Bank.
The 19 March conference call centred on the topic of getting Deutsche Bank to switch its stance to favouring HP's proposed merger with Compaq in a crucial shareholder vote that same day. Hewlett is suing HP, where he is a board member, to block that merger, and a central question in his suit is whether HP exerted undue influence to sway the bank's vote.
Hewlett attorney Stephen Neal read from the transcript, in which Fiorina urged Deutsche Bank to change its vote, thanked the bank representatives for listening, and told them that the vote was "of great importance to their ongoing relationship."
Later in the morning, however, an advisor to Hewlett testified that in conversations he had with Deutsche Bank executives, no one had said they felt pressured by HP.
Over the objections of HP attorneys Steven Schatz and Boris Feldman, Neal peppered Fiorina with questions about the transcript, which she said she hadn't read carefully. In the transcript, the chief executive also said that HP's design for integration with Compaq was "not based on theoretical plans."
Fiorina said that all the transcript showed was that she was appreciative of Deutsche Bank's time, and she reiterated that HP did not buy votes.
HP's lawyers, who introduced the transcript into evidence on Wednesday, argued that the transcript shows only that Neal's claim of bribes-for-votes is thin.
"That's what your bribe case comes down to, a statement at the end of a conference call," Feldman said.
At one point while Fiorina was on the witness stand, Neal stood close by, much as Al Gore had encroached on George Bush during a debate during the 2000 presidential campaign. Feldman implored Neal to back away.
"Can you give her a little room?" he asked.
Fiorina had seemed taken aback to be recalled to the witness stand. After her previous two days of testimony, when she'd held her ground against the Hewlett side, on Thursday morning she'd been jaunty as she walked up the courthouse steps.
Hewlett has also testified in the hearing. Under cross-examination on Wednesday, he acknowledged that he had no reason not to believe HP executives when they said they had not bought Deutsche Bank's vote.
On Thursday morning, Neal also called HP chief financial officer Bob Wayman to the stand to discuss the transcript, but Wayman said he did not recall many of the specifics of the call.
In addition, Hewlett's attorney brought forward an internal HP memo that encouraged voting parties to consider the company's customer relationships.
It is unclear whether the transcript will be made public. Initially on Thursday the court and attorneys for both sides agreed to making it public, but shortly after Neal's questioning, HP's lawyers said they had a request from Deutsche Bank that it be marked confidential. The parties will decide on the matter at the lunch break.
Following the HP executives, Fleischer, the advisor to Hewlett, answered questions from HP's attorneys about his relationship with Hewlett and the fees he would get if the merger vote were to fail. The HP side pointed out that Fleischer's $12m was much larger than the $1m HP had agreed to pay Deutsche Bank if the merger were to succeed.
Hewlett's attorneys, meanwhile, countered that a payment from HP to Goldman Sachs, if the merger were to go through, would be much larger than the fee to Fleischer.
Other questions focused on meetings between Fleischer and Deutsche Bank -- including one on 19 March, the day of the shareholder vote that narrowly approved the Compaq merger -- about whether the bank would vote against the deal.
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