UPDATE 1-Sky Deutschland’s reports faulty, watchdog rules

* German financial svcs watchdog BaFin rules against group

* Group overstated number of subscribers, BaFain says

* Did not fully inform investors about risks, costs -BaFin

* Group says might have to correct all reports since 2007

* BaFin statement was reported by Sky Deutschland
(Adds details, spokesman, background)

FRANKFURT, Nov 22 (BestGrowthStock) – German pay-TV broadcaster Sky
Deutschland (SKYDn.DE: ) is in trouble again for its accounting
as the German financial watchdog BaFin ruled it misstated
risks, subscriber numbers and earnings in at least 5 reports.

The charges might lead to fines and claims for damages,
said the company, in which News Corp (NWSA.O: ) holds a 49.9
percent stake and which posted its only full-year profit five
years ago. [ID:nLDE6AA0OZ]

The company plans to appeal against the ruling, a spokesman

The broadcaster already had to admit in 2008 it only had
just more than half of the some 4 million subscribers it
claimed to have in Germany, where the only major pay TV
provider is up against people accustomed to more than 30 free
public or private TV stations.

BaFin now has dealt another blow to Sky Deutschland’s
ambitions just after the company’s shares dropped to an
all-time low of less than 1 euro ($1.37) in October from some
14 euros three years ago.

In all reports for the year 2007 and in the half-year
report for 2008 the broadcaster overstated the number of its
subscribers by more than 600,000, BaFin ruled, according to a
Sky Deutschland statement to the Frankfurt stock exchange from

That would be 14 percent less than the 4.2 million
subscribers Sky Deutschland reported as of June 30, 2008, when
it was still called Premiere and before Rupert Murdoch in 2009
launched his attempt to turn the company around with News

The Munich-based provider might have to correct all its
reports since 2007 if the BaFin ruling was upheld, it said in
the statment, but that would not affect its balance sheet.

“The BaFin ruling does not affect the operation of the
company, nor its capital or its loans,” the company spokesman
said early on Tuesday, without specifying potential damages
from ensuing claims.

The TV provider also did not fully inform investors about
risks and payments for several seasons related to the
acquisition of the rights to transmit the main German football
league, the Bundesliga, BaFin charges, according to the

In the report for the first six months of 2008, Sky
Deutschland overstated the earnings situation by at least 10
million euros ($13.73 million) and did not fully inform
investors about risks to the financial situation of the
company, the watchdog said, according to Sky Deutschland.

BaFin was not available to comment further.

Sky Deutschland plans to appeal the BaFin decision and
would take the ruling to the higher administrative court if
necessary, the spokesman said.

“The issue will remain pending for at least a year,” he

The company has just settled lawsuits from several funds
that held shares in Sky Deutschland against the payment of 14.5
million euros, in settlements that would bar these funds from
suing the broadcaster again, he said.
(Reporting by Peter Dinkloh; Writing by Peter Dinkloh; Editing
by Gary Hill)

UPDATE 1-Sky Deutschland’s reports faulty, watchdog rules