John Gregg, finance director of embattled telco NTL, is one of four senior executives facing a class action lawsuit for allegedly 'artificially inflating the price of NTL shares'.
The suit filed by US law firm Milberg Weiss Bershad Hynes & Lerach claims Gregg along with chief executive Barclay Knapp, UK boss Stephen Carter and chairman George Blumenthal concealed ‘the true financial and operational condition of the company because they owned millions of options to purchase shares.’
The law firm, which is also leading the class actions suits against Enron, alleges the directors tried to ‘artificially inflate the price of NTL shares,’ to pay for acquisitions with over-inflated stock, failed to disclose the company was ‘unable to effectively integrate its acquisitions and was experiencing substantial difficulties in operating its business.’
It also accuses NTL of continuing to bill customers for cancelled accounts to create the impression it was keeping customers.
The class action comes as a bid by US media mogul John Malone to seize control of the cable company was knocked back for being too low, although it is understood that Barclay Knapp is in favour of future merger negotiations once its bond-holder rescue package is completed in July.