THE HAGUE, 05/05/07 - The appeal court in The Hague has ruled that ABN Amro Bank and Goldman Sachs acted wrongfully towards investors in the bourse flotation of Internet company World Online in March 2000. The ruling offers scope for damages claims, the shareholders association (VEB) believes.

ABN Amro and Goldman Sachs should have intervened when World Online gave too optimistic a picture of its IPO in press releases. The banks should also have taken corrective action when confusion arose in the press about the size of the stake held by founder Nina Brink in World Online. She stepped out of the company shortly after the IPO and cashed in heavily, after which the share price collapsed.

The issue prospectus contained some inaccuracies. But as well as supervising the accuracy of the prospectus, banks guiding a company onto the bourse should take care of their obligation to prevent as far as possible an incorrect picture being given. It could be expected of the banks that they "had properly instructed" the leadership of World Online, according to the court.

VEB director Peter Paul de Vries believes the ruling clears the way for damages claims up to "several hundreds of millions of euros," he said in newspaper Het Financieele Dagblad. "It is good that the judge has stated that advising banks are also responsible for keeping an eye on bubble-blowing with press releases."

Part of the claims could wind up with Tiscali, owner of World Online since end-2000. De Vries expect both private and institutional investors to come knocking at the door. ABN Amro and Goldman Sachs can still fight the ruling in the Supreme Court.