Roanoke Times Copyright (c) 1995, Landmark Communications, Inc. DATE: WEDNESDAY, October 11, 1995 TAG: 9510110084 SECTION: BUSINESS PAGE: B7 EDITION: NEW RIVER VALLEY SOURCE: ASSOCIATED PRESS DATELINE: CINCINNATI LENGTH: Medium
``I have personally reviewed the facts in this case, and we are right to pursue this lawsuit,'' John E. Pepper, chairman and chief executive, said at the company's annual meeting. ``I believe our people were misled by Bankers Trust.''
P&G filed a suit in U.S. District Court after it lost $157 million - $102 million after taxes - last year on the investments in derivatives, risky securities that derive value from price changes in other assets. Bankers Trust said it did nothing wrong and is fighting P&G's allegations.
U.S. District Judge John Feikens has granted P&G's request to amend the October 1994 lawsuit to add racketeering allegations. That will give P&G a chance at collecting triple the $195 million it asks in damages and let it present all its evidence about Bankers Trust's actions, Pepper told shareholders.
Evelyn Y. Davis, a shareholder, asked Pepper how P&G executives could have committed the company to the money-losing deals.
``I think this is very naive to believe. It's like believing a car salesman,'' Davis said. ``It's just stupidity.''
She also asked Pepper what the legal expenses were for suing Bankers Trust. Pepper declined to reveal that. He said the expense is part of P&G's $64 million in annual legal costs.
Pepper said the consumer products company set a record for the amount of goods shipped worldwide for the quarter ended Sept. 30, increasing 9 percent from the year before. He said he also expects to announce record sales and profits when P&G reports figures for the quarter in about two weeks.
For the year ended June 30, Cincinnati-based P&G reported a record worldwide profit of $2.65 billion, or $3.71 per share, a 20 percent increase from $2.2 billion the previous year. P&G also had record global sales of $33.4 billion, up 10 percent from sales of $30.3 billion the year before.