Klesch sues Arkema over vinyl unit sale
PARIS, March 4
PARIS, March 4 (Reuters) - A Swiss investment group is suing specialist chemicals maker Arkema for 310 million euros ($403 million), in a dispute over its purchase of the French company's loss-making vinyl division last year.
Klesch Group, led by American investor Gary Klesch, said it had discovered significant gaps in the information presented by Arkema's management before it completed the acquisition in July of Kem One SAS, whose products are used in items ranging from pipes and packaging to paper.
"Had Klesch known of these misrepresentations at the time of negotiations it would not have entered into the transaction under the terms agreed," Klesch said in a statement on Monday.
Arkema rejected what it called "serious and false allegations", saying it was confident of demonstrating they were "totally unfounded".
Arkema said Klesch had access "in complete transparency and throughout the negotiations" to all the necessary information to assess the financial situation and prospects of the business.
The sale of the vinyls division led to a 505 million euro charge in Arkema's 2011 accounts as it refocused on products that are less sensitive to volatility in raw material prices and the economic cycle.
Formerly an adviser to President Gerald Ford and a bankruptcy consultant for the UK Treasury, Klesch built a reputation in London's financial sector in the 1980s and 90s as a defender of investor rights and was involved in high-profile corporate restructurings such as at Eurotunnel.