The court of public opinion passed quick judgment on Novartis ($NVS) and its 72-million-franc payout for departing chairman Daniel Vasella. The Swiss quickly said no, non and nein to that idea, and the company quickly abandoned that non-compete deal. But will an actual court have its chance to rule?
|Daniel Vasella of Novartis|
That's what a Swiss prosecutor is trying to determine. As Bloomberg reports, two criminal complaints have been filed in Basel, and the public prosecutor is investigating whether Vasella and his fellow board members can be charged.
At issue is Novartis' disclosure--or lack of disclosure--of the non-compete deal, which would have given Vasella an annual payment in return for his compliance. News of the plans to pay Vasella that 72 million francs (about $75 million) was originally reported by the Swiss media, rather than by the company.
Hans-Jacob Heitz, a lawyer who filed one of the complaints on behalf of shareholders, says Novartis' compensation committee and Vasella himself should have disclosed the financial terms to shareholders--in the company's latest annual report, if not before.
Heitz's complaint charges Vasella and Novartis board members with breach of trust and providing untruthful business information. The other complaint levels similar charges. The public prosecutor's spokesman told Bloomberg that the ensuing probe is "absolutely" normal and will take a couple of weeks.
- read the Bloomberg story