EM.TV CEO May Resign (updated)

EM.TV Chief Executive Thomas Haffa admitted in remarks published on Saturday that he had made mistakes managing the troubled German media group's rapid growth and hinted he would resign if he fails to regain investor trust.

In an interview with Der Spiegel magazine released before publication on Monday and confirmed as accurate by an EM.TV spokesman, Haffa said he "would clearly have to think about the consequences" if he did not win back the confidence of analysts and investors.

Florian Haffa, Thomas's brother and former chief financial officer, resigned as deputy chief executive earlier this month.

Der Spiegel also reported that Ulrich Goebel, director in charge of business affairs, had left the company. The EM.TV spokesman told Reuters that Goebel was on leave but declined further comment.

EM.TV's stock hit a low of 5.56 euros on Thursday, compared to its February peak of 120 euros, in the wake of a shock profit warning and news that the German stock market regulator had begun an analysis which could lead to a formal investigation into possible insider trading.

The Munich state prosecutor said on Friday several German shareholders had filed lawsuits against EM.TV. A lobby group for private investors also filed, saying it was concerned that management concealed the true state of the company's finances.

EM.TV rose to prominence after it bought the rights to the Muppets characters and a 50 percent stake in Formula One racing earlier this year.

Privately-held German media giant Kirch stepped in to prop up the ailing company on Monday by taking a minority stake and buying almost half of EM.TV's 50 percent stake in the Formula One holding SLEC for $550 million.

Haffa admitted that EM.TV's management had been overstretched by the aggressive expansion earlier in the year.

"During the acquisition phase we made the mistake of not keeping up with operations as well as we should have given the scale of the investments," he was quoted as saying.

Kirch executives expressed their support for Haffa in an interview with the Welt am Sonntag newspaper released ahead of publication on Sunday, pointing to his experience and knowledge of children's television.

"We are confident that the (EM.TV) management will now make a success of the core business," said Kirch Vice President Dieter Hahn.

Haffa Sold Shares

Haffa, who remains EM.TV's biggest shareholder, said he had sold some shares in the last three years, including 200,000 in the first two months of this year to an institutional investor for 40 million marks ($18.32 million).

The Frankfurter Allgemeine Zeitung said the final size of Kirch's stake in EM.TV - agreed at 16.74 percent or less - was unlikely to be fixed until mid-February after due diligence had been completed.

EM.TV's planned sale of a 45 percent stake in Tele Muenchen Gruppe (TMG) - which it bought for 800 million marks in September 1999 - back to TMG chief Herbert Kloiber would have to wait until then, the newspaper reported.

Weekly magazine Focus, in a report released ahead of publication on Monday, said Kloiber was not willing to pay more than 600 million for the stake.

EM.TV may be prepared to sell the stake for less than it paid, the EM.TV spokesman said on Saturday, noting that the company had received its share of 350 million marks raised by the sale of TMG subsidiary TM3.

Additional reporting by Alexander Huebner in Munich.