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02/16/2005
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1) Haigneré Says Turkey Should Not Take Referendum Personally
2) Violence Mars Turkish Kurd Rally on Sixth Anniversary of Ocalan Capture
3) Putin, Aliyev Satisfied with Cooperation, Increased Trade
4) Turkish Entry to EU Could Produce ‘Truly European Neighbor’

1) Haigneré Says Turkey Should Not Take Referendum Personally

(Combined Sources)–The French Minister Delegate for European Affairs Claudie
Haigneré, expressed support for a French parliamentary decision that will
require a referendum prior to the entry of any new members into the European
Union (EU).
Though the law would impact Turkey and its hopes to join the EU, Haigneré
dismissed claims that the move was a “discriminatory” measure aimed at Turkey.
Speaking at a joint press conference late on Monday following her meeting
with
Foreign Minister Abdullah Gul, Haigneré emphasized that the French
Parliament’s
decision, which is likely to be finalized by the French Senate, was not a
“double standard” directed solely towards the Turkish people.
“It’s not possible to discriminate against any potential EU partner,”
Haigneré
was quoted as saying by the Anatolia news agency. She added that a referendum
would be held prior to Croatia’s admittance and that Britain’s EU membership
had also been voted on in a referendum in the past.
A member of the Turkish Parliamentary Adjustment Commission Onur Oymen said,
“a referendum is something against Turkey. We understand France’s internal
policy requirements, but Turkey does not want to pay the cost. The referendum
will affect negatively Turkey’s membership [to the EU], as well as
Turkish-French friendship.”
Oymen also revealed that while in France earlier this week, he was told by
many that, “if Turkey does not recognize the Armenian genocide, it will not
join the EU. This may affect Turkey-France relations negatively,” he said.
Haigneré stressed that the idea of holding a referendum was initially
suggested by French President Jacques Chirac, as it paved the way for him
to be
able to support the Dec. 17 EU decision to open entry talks with Turkey on
Oct.
3 in the face of opposition to the idea in France.
Chirac, who is known to favor Turkey’s EU entry, has been facing political
isolation in his own country as he has been confronted with strong opposition
from both the public and his own center-right Union for People’s Movement
(UMP)
party for his support of Turkey’s EU membership hopes.

2) Violence Mars Turkish Kurd Rally on Sixth Anniversary of Ocalan Capture

Turkish rights group seeks protest violence probe

At least 15 people injured and 20 others detained in Diyarbakir in
southeastern
Turkey after police clash with protesters on the anniversary of a Kurdish
rebel
leader’s arrest.

ISTANBUL (AFP/Reuters)–A Turkish rights group, on Wednesday, called for a
probe into what it called excessive use of force by police in breaking up
protests marking the sixth anniversary of Kurdish rebel leader Abdullah
Ocalan’s capture.
Riot police sprayed tear gas and wielded batons on Tuesday to disperse
hundreds of pro-Ocalan protesters in Istanbul and Diyarbakir, the main city in
the largely Kurdish southeast.
Local police said they were investigating the death from apparent gunshot
wounds of a 19-year-old man in the southern port city of Mersin, where
protesters threw rocks at police. There were also smaller clashes between
police and demonstrators in the Aegean city of Izmir and the eastern town of
Van.
Ocalan, serving a life sentence in a Turkish prison after special forces
captured him in Kenya in 1999, still commands support among sections of the
Kurdish population.
The Human Rights Association (IHD), a leading Turkish rights group, called on
the Interior Ministry and prosecutors to launch administrative and judicial
investigations into those responsible for Tuesday’s violence.
“We in the Human Rights Association condemn this mode of operation which is
based on violence, pressure and obstructing the exercise of rights,” IHD
Chairman Yusuf Alatas said in a statement.
A police spokesman said police had not yet issued a statement on the
allegations of excessive force.
Turkish special forces brought Kurdistan Workers Party (PKK) leader Ocalan
back to Turkey from Kenya in 1999 after a three-month chase around Europe and
Africa.
Before his capture, Ocalan had been searching for a safe haven. Syria threw
him out of Damascus under Turkish military pressure in November 1998. He
failed
to find long-term refuge in Italy, Russia, the Netherlands and other European
countries.
He was sentenced to death for high treason on June 29, 1999, but the verdict
was later commuted to life imprisonment once Turkey abolished the death
penalty
as part of a European Union-inspired rights reform drive.
The PKK launched a fight for an ethnic homeland in southeast Turkey in 1984.
More than 30,000 have died in two decades of conflict. Violence dwindled after
his capture but revived after the group called off a unilateral ceasefire last
June.

3) Putin, Aliyev Satisfied with Cooperation, Increased Trade

MOSCOW (Itar-Tass)– After talks in the Kremlin on Wednesday, Russian
President
Vladimir Putin and Azeri counterpart Ilham Aliyev said they were satisfied
with
the developing cooperation between their two countries, as well as the trade
growth rate.
“Trade turnover reached a record high last year, increasing 50 percent, to
about 800 million US dollars. Our trade will soon reach one billion U.S.
dollars,” Putin said. “I’m convinced that we’ll reach it shortly.”
Aliyev said that Azerbaijan could not have imagined that the rate of trade
would expand so rapidly. “The goal is to double trade in the future and today
this appears to be realistic,” he noted.
Pointing to the speed with which projects were implemented during the past
year, Aliyev said that the two countries clearly hold mutual interests for
mutual benefits.
“It would be impossible to reach such figures without effective political
contacts,” Aliyev said.
Putin revealed that Russian companies are ready to invest in Azerbaijan,
noting that there exist “concrete projects.”
According to Azerbaijan, 10.9 percent of its 2004 overall import-export was
with Russia–second only after Italy.

4) Turkish Entry to EU Could Produce ‘Truly European Neighbor’

YEREVAN (RFE-RL)–Defense Minister Serge Sargsian looks forward to the
start of
membership talks between Turkey and the European Union (EU), saying that
Armenian could–for the first time, have a “truly European neighbor” as a
result.
In an online news conference earlier this week with readers of the Armenian
Revolutionary Federation’s (ARF) “Yerkir” weekly, Sargsian argued that the
prospect of EU membership could lead Turkey to reopen its border and establish
diplomatic relations with Armenia.
“It is my conviction that the start of membership talks between Turkey and
the
EU has a purely practical significance for us and will further contribute to
the resolution of issues mentioned by you,” he said in response to a question
about Ankara’s continuing refusal to normalize ties with Yerevan without
preconditions.
Sargsian added that Armenia wants Turkey to “develop progressively… in
accordance with European values and standards.” Armenians should therefore be
encouraged by the “possibility of having a truly European neighbor in 15-20
years’ time,” he said.
The remarks represent the most positive assessment yet by a senior Armenian
official of the EU’s decision late last year to open accession talks with
Ankara by the end of 2005.
Official Yerevan’s initial reaction to the move was far more negative, with
Foreign Minister Vartan Oskanian accusing the EU of turning a blind eye to the
Turkish blockade. “We believe that Turkey did not deserve to get the right to
begin accession talks with the European Union at this point,” he said in
October.
However, Oskanian struck a more positive tone in December after receiving
assurances from European leaders that they will raise Armenian grievances with
the Turks during the accession process.
Sargsian’s comments contrast even more sharply with the position of the ARF,
as well as a number of Diasporan organizations in western Europe and France.
They have for months campaigned against admitting Turkey into the EU, saying
that Ankara must first stop denying the genocide of 1915, which claimed the
lives of 1.5 million Ottoman-Armenians.
But Sargsian stressed that Armenia and Armenians worldwide can continue to
work for genocide recognition, even while Turkey knocks on the EU’s door.
“As a
statesman, I very much hope that the recognition of the Armenian genocide by
Turkey will greatly contribute to the security of our state,” he said.
During the online conference, Sargsian did not shy away from questions
dealing
with his relationship to the ARF, which he stated deserved its “due respect.”
“I don’t think that anybody has reason to consider me an ardent supporter of
Dashnaktsutyun [ARF],” he told one of Yerkir’s readers.

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–Boundary_(ID_PMbapeZsOBuYztZF2JZG/g)–

NEWS FROM SHUSHI REGION

Azat Artsakh – Nagorno Karabakh Republic (NKR)
17 Feb 05

Last year significant repair works were carried out in the town
and region of Shushi. According to the vice head of the regional
administration S. Harutiunian, Ghazanchetsots Street and the roofs of
several houses damaged from wind were repaired, a new water pipeline
was built in Ghondaghsazian Street. Gasification of flats is going
on. Reconstruction of the school building in the village of Lisagor
was completed, and now the home of culture is being repaired. ***
At last one of the vital problems of the inhabitants of Shushi was
solved. The town will have a regular bus line connecting Shushi with
Stepanakert. The inhabitants of the town and regional center the most
closely situated to the capital will no more have to hitchhike to
Stepanakert. *** Up to now only the buildings of the secondary schools
after Abovian and Muratsan in Shushi had central heating. Recently
the central heating system of the regional administration building
has been operated. *** The reconstruction of the housing resources of
Shushi is going on. In 2004 42 people requested the City Hall of Shushi
to provide half-ruined apartments to them to repair on their means. Of
them15 have already carried out reconstruction. After creating minimum
housing conditions within six months the apartments are legally owned
by them. During the reconstruction works the preservation of the
architectural style is controlled by the specialists of the City Hall.

ANAHIT GABRIELIAN.
17-02-2005

AzerTag, Azerbaijan
Feb 17 2005

SPEECH OF THE PRESIDENT OF RUSSIAN FEDERATION VLADIMIR PUTIN
[February 16, 2005, 20:04:21]

“Dear Ilham Heydarovich,

Dear friends,

Today, certainly, is a significant day. We have prepared for it with
special feeling, with special goodwill for our Azerbaijan friends and
colleagues. Now, opening the Year of Azerbaijan in Russia, I am glad
to see in Moscow participants and visitors of this celebration. And,
certainly, I want to thank sincerely the President of Azerbaijan, all
people who took part in development of this action, its preparation,
for the big work, which has been done by this moment. It is
confident, what not smaller work and with huge positive result will
be done within the year.

The initiative to carry out so scale actions both in Russia, and in
Azerbaijan was born one year ago during visit of the President of
Azerbaijan Ilham Heydarovich to Moscow. It has been widely maintained
both by the public, and creative collectives. I think it could not be
differently. In fact, our peoples are interested in strengthening of
friendly relations between Russia and Azerbaijan. Peoples with the
common history, similar world visions, and close interlacing of human
destinies. At all national originality, our peoples were always
interesting and important for each other. Also it will be especially
valuable, on all turns of history, we have supported each other,
remaining trustworthy allies and kind friends.

I want to note especially, that for last years, for last decade, such
positive development of relations between Azerbaijan and Russia
became possible due to authority and wisdom of Heydar Aliyev. We in
Russia remember, we honor his merits and his memory. Peoples of
Russia and Azerbaijan faithfully regard our common heritage both in
peace, and in military. I shall not list names of everyone who has
brought in huge contribution to science, culture of the former Soviet
Union, in our common development. The brotherhood of our peoples has
passed training in struggle against fascism. The 60th anniversary of
the Victory comes nearer. And, it is natural, that we shall mark it
together. I am grateful to the President of Azerbaijan that he has
accepted the invitation and will be in Moscow on May 8-9 this year.
Taking the chance, I want to greet veterans of Azerbaijan. We honor
courage and heroism of 600 thousand Azerbaijanis, which
self-denyingly battled on fronts of Great Patriotic War and brought
our general victory. 42 from them became Heroes of Soviet Union, and
12 -knights of “Slava” Order. Today, the Russian-Azerbaijan
political, economic and cultural dialogue consistently and actively
develop. Citizens of both countries connect with its development the
solution of the vital problems. The question is mutually advantageous
cooperation, about questions of employment and migration, about use
of the common cultural-information space, including in sphere of
education, and also about preservation of rich national traditions.
Just the President has mentioned that for last year our commodity
circulation has grown for 50 percent. It is bright result of last
years. I would like to emphasize especially also, that our
partnership is a significant factor of regional stability. We are
equally interested in more active use of CIS opportunities. And for
solution of our common social and economic problems, and for joint
counteraction to threats of national safety, terrorism and extremism.
Russia aspires to promote also to a worthy outcome of the Karabakh
problem and provide reliable safety in this region.

In rapprochement of peoples of Russia and Azerbaijan, we give a
special role to humanitarian connections; we support preservation of
the common spiritual heritage of our peoples. And in this connection,
I want to note successful realization of the first stage of the
Program of cooperation in the humanitarian sphere designed for
2004-2006. Human contacts are inexhaustible strategic resource, which
underlies original interethnic and inter-confessional consent. And
the weightiest word here belongs to creative and scientific
intelligentsia, the religious public, and representatives of the most
different faiths, the Diasporas. Their authority and creative energy
are capable to enrich our dialogue considerably. It is convinced that
uniting all these programs the Year of Azerbaijan in Russia should
open road to new public and business initiatives, direct contacts
between people. We support the closest cooperation with Azerbaijan
and we feel same on the part of our partners.

Once again I want to wish our nations peace and welfare, and to the
Year of Azerbaijan in Russia I want to tell: “Welcome!”

***

After the official part, was held concert with participation of the
masters of art of Azerbaijan.

RUSSIANS AND AZERIS ARE RELIABLE ALLIES AND GOOD FRIENDS – PUTIN

RIA Novosti, Russia
Feb 16 2005

MOSCOW, February 16 (RIA Novosti) – On Wednesday night the presidents
of Russia and Azerbaijan participated in the official ceremony of
opening the Year of Azerbaijan in Russia.

“For all their national originality our peoples have always been of
interest and importance to each other. What is especially valuable,
at every turn of history Russians and Azeris supported each other,
remaining reliable allies and good friends”, President Vladimir
Putin said.

He noted the role of the former president of Azerbaijan, Geidar
Aliev. “In the last decade the positive development of relations
between Azerbaijan and Russia has become possible thanks to the
authority and wisdom of Geidar Aliev. We in Russia remember and
cherish his merits and memory”, the Russian head of state said.

“The brotherhood among our peoples has been tempered by fire in the
struggle against fascism”, Mr.Putin noted. “The 60th anniversary of
Victory is approaching and we will, certainly, mark it together”.

The Russian president thanked President Ilham Aliev for accepting
his invitation to visit Moscow on May 8-9 of this year.

“We cherish the courage and heroism of 600,000 Azeris which selflessly
fought on the fronts of the Great Patriotic War and forged our common
victory”, the Russian president said. And recalled that 42 Azeris
became Heroes of the Soviet Union and 12 full-class holders of the
Order of Glory.

As to the present day of Russian-Azeri relations, Mr.Putin stressed
that the political, economic and cultural dialog between Russia
and Azerbaijan is actively developing. “It is mutually beneficial
cooperation, job placement and migration, use of the common cultural
and information space, including in the sphere of education”, he said.

Mr.Putin called the partnership of Russia and Azerbaijan “a significant
factor of regional stability”. Russia and Azerbaijan “are in equal
degree interested in more active use of the opportunities of the CIS
for the solution of common socio-economic problems, joint opposition
to national security threats, terrorism and extremism”.

Mr.Putin assured that Russia “seeks to worthily untie the Karabakh
knot and ensure reliable security in the region”.

In conclusion President Putin said that Russia “stands for the
closest cooperation with Azerbaijan and feels the same mood in the
Azeri colleagues”.

Putin, Aliyev open Year of Azerbaijan in Russia

ITAR-TASS, Russia
Feb 16 2005

In his speech Putin said, “Due to national identity our peoples
always show interest in and will be very important for each other.”
“The most valuable thing is that in all turns of their history Russians
and Azeris assisted to each other and remained reliable allies and
good friends.”

“In the last 10 years the positive development of relations between
Russia and Azerbaijan was conditioned by Geidar Aliyev’s authority
and wisdom. We, Russians, remember and honour his merits,” Putin said.

He recalled, “Brotherhood of our people experienced in the fight
against fascism. We’ll soon mark the 60th anniversary of VE-Day and it
is natural that we’ll celebrate it together.” The Russian president
thanked Aliyev for he accepts the invitation to visit Moscow as part
of the VE-Day celebrations.

Addressing Azerbaijan’s veterans Putin said, “We honour courage and
heroism of 600,000 Azeris who fought on the fronts of World War II
and struggled for the common victory.” A total of 42 Azeris were
given the title of Heroes of the Soviet Union. Twelve Azeris were
awarded complete sets of the Order of Glory.

On the present development of Russian-Azerbaijani relations, Putin
said political, economic and cultural cooperation is developing
dynamically. “I mean mutually beneficial cooperation, the creation of
new jobs and migration, the use of the common cultural and information
space, including in the field of education,” the president explained.

He stressed that Russia and Azerbaijan “are a significant factor
of regional stability.” Russia and Azerbaijan “are interested in
using the CIS possibilities more actively in order to solve social
and economic problems and jointly counteract the threats to national
security, terrorism and extremism.”

The Russian president said he is convinced that Russia “seeks to do
its best to settle the Nagorno-Karabakh conflict and ensure reliable
stability in the region.”

Putin considers the openness of Year of Azerbaijan in Russia “an
absolutely landmark event.”

“It’s very pleasant that our meeting have become regular. Now you’ve
arrived for such pleasant reason – to open Year of Azerbaijan in
Russia,” the Russian president said.

“We attach much significance to this event. I hope that the year 2005
will facilitate the expansion of bilateral friendly relations. We’ll
become closer,” Aliyev said. He expressed the hope that Year of Russia
in Azerbaijan will be held in 2006.

–Boundary_(ID_g1phpfgLI3YwpO3Xo+bOsg)–

Russian foreign minister discusses antiterror fight, economic issues in Armenia

Public Television of Armenia, Yerevan
17 Feb 05

Russian Foreign Minister Sergey Lavrov is in Armenia on an official
visit.

Today he met Armenian Foreign Minister Vardan Oskanyan and Prime
Minister Andranik Markaryan.

Boosting cooperation in the struggle against terrorism, Armenia’s
transport problems, the situation in the fuel and energy sector,
the implementation of agreements reached by Russia and Armenia were
discussed at the meeting with the Russian official.

A delegation led by Sergey Lavrov visited Tsitsernakaberd in the
afternoon and laid flowers at the genocide memorial. Armenian Foreign
Minister Vardan Oskanyan accompanied Sergey Lavrov.

[Video showed the meeting]

World Bank approves 11m-dollar loan for Azeri refugees

Bilik Dunyasi news agency
17 Feb 05

Baku, 17 February: The Board of Directors of the World Bank [WB]
has approved the project “Assistance to economic development of
internally displaced persons [IDPs]”.

The 11.5m-dollar project envisages improving living conditions, as
well as the social situation of people who became IDPs in the wake
of Armenia’s occupation of Azerbaijani lands and accelerating their
integration into society.

A total of 200 micro credits each totalling around 50,000 dollars will
be allocated to IDPs within the framework of the project in order to
better their socio-economic situation.

The credits will be allocated to Azerbaijan for a period of 35 years,
including the first 10 years on favourable terms.

Azerbaijan has received loans worth about 620m dollars for 25 projects
since it became a member of the WB in 1992.

Claudie Haigneré invite la Turquie à faire un travail de mémoire

Nouvelles d’Arménie Magazine
16 février 2005

EUROPE, mercredi 16 février 2005 – ARMENEWS- La ministre française
déléguée aux Affaires européennes Claudie Haigneré en visite à
Ankara a invité lundi la Turquie à faire “un travail de mémoire”
sur le génocide arménien. “La construction européenne se fait sur la
paix et sur le bon voisinage. Il y a un travail de mémoire qui est
nécessaire pour tous”, a-t-elle notamment dit lors d’une conférence
de presse avec le ministre turc des Affaires étrangères Abdullah Gul.

–Boundary_(ID_RpUeEBZlM1peXWXpiX6PpA)–

Nouvelles d’Arménie Magazine
16 février 2005

Un homme d’affaires turc propose à la FRA de dialoguer avec la
Turquie

CAUSE, mercredi 16 février 2005 –ARMENEWS- Kaan Soyak, homme
d’affaires turc qui soutient depuis longtemps la reprise des
relations avec l’Arménie, a appelé lundi la FRA à entamer un dialogue
avec la Turquie. ” Je les invite sérieusement en Turquie pour une
discussion. Si le parti Dachnaktsoutioun est d’accord pour engager un
dialogue avec la Turquie, je vous promets que je ferais de mon mieux
pour l’organiser “, a souligné Kaan Soyak, l’un des deux coprésidents
du Conseil des affaires arméno-turques, lors d’une conférence à
Erevan. Il n’a cependant pas précisé quelles formes pourraient
prendre ce dialogue. Il a simplement expliqué qu’il pourrait
entraîner des ” résultats sérieux ” et donner à la FRA l’opportunité
de changer son image, négative, en Turquie. Selon lui, le
Dashnaktsoutioun n’est pas aussi anti-turc qu’il est présenté dans
son pays. ” En Turquie, le parti Dashnaksoutioun a une image
négative. Mais si vous me demandez mon avis, je décrirais ce parti et
ses leaders comme sérieux et sensés “, a précisé Kaan Soyak.
Ce dernier a lancé l’invitation immédiatement après avoir ” félicité
le peuple arménien” de la part du Premier ministre turc et du
ministre des Affaires étrangères. Mais on ne sait pas si Ankara a un
lien avec cette offre. Les cercles politiques turcs et les médias
affirment souvent que la FRA est un obstacle clef à la normalisation
des relations arméno-turques. Ils utilisent également le soutien
implicite du parti Dashnaktsoutioun aux demandes territoriales de
l’Arménie pour accuser Erevan de ne pas reconnaître la frontière
entre les deux pays.
La FRA est favorable à une attitude ferme envers la Turquie et
demande la reconnaissance du génocide arménien avant toute
normalisation des relations bilatérales. Les leaders du parti ont
dénoncé les efforts américains pour apaiser les tensions qui ont
conduit à la création du Conseil des affaires arméno-turques. Ils
sont également opposés à la réouverture de la frontière arméno-turque
qu’Ankara a fermé par solidarité avec l’Azerbaïdjan.
Le ministre turc des Affaires étrangères, Abdullah Gul, a rassuré la
semaine dernière son homologue azéri, Elmar Mammadyarov, en affirmant
que la frontière resterait fermée jusqu’à une résolution du conflit
du Karabagh. Le gouvernement arménien a souvent appelé la Turquie à
renoncer à cette précondition. Cette position est d’ailleurs soutenue
par les hommes d’affaires arméniens et turcs du conseil. Soyak a
précisé que ses collègues et lui allaient continuer à lutter pour la
réouverture de la frontière mais n’était pas très optimistes. Kaan
Soyak a estimé le volume annuel des échanges entre les deux pays, la
plupart passant par la Géorgie, à 120 millions de dollars. Selon lui,
ce chiffre triplera quand l’embargo de la Turquie sera suspendu.

–Boundary_(ID_GcVlxpoQUXShpnjPtMi7fg)–

MERGER OF EQUALS ON TRIAL: Kerkorian-DCX case in limbo a year later
*BY SARAH A. WEBSTER*

DETROIT FREE PRESS BUSINESS WRITER

/February 16, 2005/

Time, it seems, does not heal all wounds.

*TIMELINE*
Key dates in the dispute between DaimlerChrysler AG and billionaire Kirk
Kerkorian:

May 7, 1998: Chrysler Corp. and Daimler-Benz AG announce plans for a
merger of equals. Billionaire investor Kirk Kerkorian also enters into a
contract with the automakers, promising to vote his Chrysler shares in
favor of the deal.

Aug. 6, 1998: Daimler and Chrysler send a proxy statement and prospectus
of the merger to shareholders. It notes that Chrysler’s largest
shareholder, Kerkorian, has already pledged his support.

Sept. 18, 1998: Chrysler shareholders approve the merger.

Nov. 17, 1998: The deal closes, and DaimlerChrysler is born. For each
share of Chrysler, holders of the automaker’s stock receive 62 percent
of a share in the new company.

Jan. 6, 1999: DaimlerChrysler shares reach an all-time high of $105 a share.

Oct. 30, 2000: The Financial Times publishes an interview with
DaimlerChrysler CEO Juergen Schrempp, in which the former Daimler
chairman appears to boast about how he planned to make Chrysler a
division all along but had to go about it in a “roundabout way” for
“psychological reasons.”

Nov. 17, 2000: Chrysler President James Holden is fired, and former
Daimler executive Dieter Zetsche takes his place.

Nov. 27, 2000: Kerkorian files a lawsuit against DaimlerChrysler and
Schrempp, alleging the merger was a takeover that cheated him out of a
higher price. Other shareholders also file suit on the same grounds,
eventually forming a class action.

Aug. 22, 2003: DaimlerChrysler reaches a $300-million settlement
agreement with shareholders in the class action, but not with Kerkorian.

Dec. 1, 2003: A trial in the case between Kerkorian and DaimlerChrysler
begins.

Dec. 16, 2003: The trial goes into recess after DaimlerChrysler lawyers
discover more than 60 pages of confidential notes detailing the merger
that were not properly disclosed to Kerkorian’s legal team.

Feb. 9, 2004: The trial resumes, with key witnesses, such as Schrempp,
recalled to the stand.

Feb. 11, 2004: The trial in the case ends.

By Sarah A. Webster

It’s been more than a year since the high-stakes trial ended between
billionaire casino magnate Kirk Kerkorian and DaimlerChrysler AG
Chairman Juergen Schrempp.

The controversy erupted in 2000 after the Financial Times recorded
an interview with the confident Schrempp, in which he says that he
never meant for the 1998 combination of the German Daimler-Benz AG
and the American icon Chrysler Corp. to be the “merger of equals”
he promised investors.

Kerkorian promptly sued, calling the union a takeover and alleging
that Schrempp’s misrepresentation cheated him out of an acquisition
premium that Daimler should have paid for his Chrysler stock.

“It’s about deceit and fraud,” the angry billionaire has insisted.

Despite a nearly five-year legal war over the $36-billion transatlantic
deal, the two sides — neither of which wanted to talk for this report
— show no signs of settling or reconciling. Nor is there a sign of
an imminent ruling by Judge Joseph J. Farnan Jr., who oversaw the
dramatic trial that had only 13 days of testimony but stretched over
three months.

The trial began in a federal court in Wilmington, Del., in December
2003. But it was interrupted with the surprise discovery of previously
misplaced internal Chrysler documents that Kerkorian’s lawyer, Terry
Christensen, called “a road map to what went on.”

DaimlerChrysler should have turned the documents over to Kerkorian’s
lawyers before the trial started, but they were reportedly misplaced
by a copying company, prompting the judge to stop the trial and
investigate whether the automaker might have deliberately concealed the
documents. The court eventually concluded that two copying companies
in different cities “probably mishandled” the documents and did not
punish the automaker.

The trial, which called heavyweights such as Kerkorian, Schrempp and
former Chrysler Corp. Chairman Robert Eaton to the stand, eventually
ended Feb. 11, 2004, with the last documents filed in the case in May.

DaimlerChrysler officials previously told investors that they expected
Farnan to rule on the case before the end of 2004. But the company
has stopped guessing when a ruling might come.

During a recent conference call with journalists, Chrysler Group CEO
Dieter Zetsche, who replaced former Chrysler President James Holden
in 2000, said he could not predict what impact a ruling might have
on the company.

“I can’t speculate on the effect because I don’t know when” a ruling
might come, Zetsche said.

Because this was a bench trial, or one with no jury, Farnan must
determine whether anyone is guilty of wrongdoing and whether Kerkorian,
now 87, suffered any damages.

Kerkorian is asking for about $1 billion in damages because he alleges
Schrempp, now 60, and other Daimler-Benz officials lied to him that
the deal would be a merger of equals. In so doing, he says the German
officials cheated him and other investors out of a premium usually
paid in takeovers.

Mergers between companies tend to garner less of a premium, if one
is paid at all. But experts testified during the trial that premiums
range all over the map in mergers and acquisitions and they often
depend on the details of the deal.

On the tape that served as a critical piece of evidence in the trial,
Schrempp, the former chairman of Daimler-Benz, explained how he planned
to make Chrysler a division all along but had to go about it in a
“roundabout way” for “psychological reasons.”

The notion that the merger was actually a takeover also was the subject
of a 2000 book, “Taken for a Ride: How Daimler-Benz Drove Off with
Chrysler,” written by Bill Vlasic and Bradley Stertz, which detailed
inner machinations within the companies that seemed to support the
idea of a secret takeover masterminded by Schrempp.

In 2003, DaimlerChrysler settled a class action with a group of former
Chrysler Corp. investors for $300 million over the allegations. But
Daimler officials maintained they did nothing wrong and that Kerkorian,
who was Chrysler Corp.’s largest shareholder at the time of the deal,
was better informed about the terms than most investors. The automaker
says Kerkorian is a savvy businessman who is entitled to nothing.

Peter Henning, a professor at Wayne State University Law School,
said that he is somewhat surprised that Farnan has taken so long to
rule on the case.

“It may well be a signal that he’s struggling over one of the issues,”
Henning said.

On the other hand, Henning noted that a year is not such a long time
for a ruling in a complex securities case such as this. The judge has a
lot of information, much of it complicated and conflicting, to digest.

What’s more, this isn’t a high-priority dispute, like a criminal case
where a defendant is waiting around in a prison cell. At its core,
this is a civil battle between two wealthy companies, DaimlerChrysler
AG and Kerkorian’s Tracinda Corp., both of which can afford legions of
high-powered lawyers. The legal bills related to this case, according
to various sources, surpassed $50 million last year.

“This is not one of those cases where justice delayed is justice
denied,” Henning said. “This is a case about money.”

Henning noted that any damages Farnan might award will likely come
with accumulated interest from the time of the damage.

The judge also may be taking his time to craft a careful ruling
that will withstand an appeal, since whatever side loses is likely
to appeal. While a jury wouldn’t have had to explain the reason for
its ruling, Henning noted, “The judge has to.”

It’s unclear where this dispute might rank on the judge’s priority
list. Many federal judges have lengthy backlogs of court cases.

Some auto reporters have nicknamed Farnan “Slow Joe” for his handling
of this high-profile dispute. But a federal report last year showed
Farnan had 16 cases on his docket that were more than 3 years old,
not nearly as bad as some of his peers. By comparison, several federal
judges have more than 80 cases more than 3 years old on their dockets.

/Contact SARAH A. WEBSTER at 313-222-5394 or [email protected]
<mailto:[email protected]>./

*Copyright © 2005 Detroit Free Press Inc.*

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