Nokia defeats U.S. shareholder lawsuit over Alcatel-Lucent integration, 5G progress, Telecom News, ET Telecom

NEW YORK: US judge rejects case accusing Finnish telecommunications company Nokia of shareholder fraud by covering up problems in the integration of the former Alcatel-Lucent and in its readiness to become a leader in 5G technology.

In a ruling Monday night, U.S. District Judge Andrew Carter said in Manhattan that Clyde Waite, the plaintiff leading the proposed class action, had failed to identify any statements by Nokia that were false or misleading when they were made.

He also said that it was not plausible that Nokia’s statements would mislead reasonable investors, given “the company’s numerous and continuous revelations about Alcatel integration and progress in 5G. “

Carter dismissed the case with prejudice, which means it cannot be reopened.

Waite’s lawyers did not immediately respond to requests for comment outside office hours. Nokia’s lawyers and former chief executive Rajeev Suri, who was also indicted, did not respond immediately to such requests.

The lawsuit began after Nokia said in March 2019 that it had alerted regulators to “compliance issues” with Alcatel-Lucent, which it bought in 2016 in a transaction initially valued at 15.6 billion euros, although any sanctions should be irrelevant.

Then, in October 2019, Nokia reduced its profit prospects and stopped its dividend, citing the need to spend more money amid “competitive intensity” for a 5G market share.

The price of Nokia’s US depositary receipts fell by about 6% immediately after the announcements in March and nearly 24% after the announcements in October.

Earlier this month, Nokia said it expects to cut about 10,000 jobs from about 90,000 employees within two years as new CEO Peka Lundmark tries to increase margins and catch up with its 5G competitors.

Nokia’s rivals include Sweden’s Ericsson and China’s Huawei Technologies.

The case is In re Nokia Corporation Securities Litigation, US District Court, Southern District of New York, No. 19-03509.