News

SEC Asked to Probe AT&T-Comcast

3/26/2002 6:48 AM Eastern

A major labor union complained to the Securities and Exchange Commission that
AT&T Broadband and Comcast Corp. are seeking shareholder approval for their
merger in a manner that violates securities law.

The compliant was lodged in a March 20 letter to the SEC by Richard Trumka,
secretary-treasurer of the AFL-CIO.

In the three-page letter, Trumka said AT&T Corp. is asking shareholders
to approve the combination of its AT&T Broadband cable unit and Comcast,
along with a series of corporate-governance matters relating to the new
company.

Trumka told the SEC AT&T shareholders by law should be allowed to cast
separate votes on the merger and at least six other corporate-governance issues.
A single shareholder vote on all issues would violate a 1992 SEC rule that
prohibits such bundling, he added.

'We therefore urge the [SEC] staff, as part of its review of AT&T's
preliminary proxy statement, to require that AT&T separate the various
proposals,' Trumka said.

Comcast declined to comment on the AFL-CIO letter. An SEC spokesman said the
agency would not comment on the substance of Trumka's letter.

Although the merger might afford shareholders 'material economic benefit,'
Trumka said, AT&T and Comcast are planning to put in place a
corporate-governance structure that gives management too much power relative to
shareholders.

He complained that the AT&T-Comcast board would not meet until 2005, that
no one could acquire 10 percent voting power without broad approval and that the
Roberts family would control 33.3 percent voting power despite holding 'less
than 1.5 percent' economic interest in the new cable company.

These moves, Trumka said, would prevent shareholders from holding the
AT&T-Comcast board 'accountable to our interests and concerns,' would
prevent a hostile takeover 'for at least the next three years' and would prevent
the board from replacing AT&T-Comcast management 'for up to eight
years.'

The AFL-CIO consists of 66 unions representing 13 million workers in all 50
states, union spokeswoman Lane Windham said.

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