Why do companies lie to shareholders?

  • 2010-02-21
  • Helsinki Times

NOKIA is getting sued again. This time it is a class-action lawsuit filed by investors in America, alleging that the company hid production problems and failed to disclose discounting that eroded margins. Nokia denies the charges and will defend itself in court.

THIS isn't the first time Finland's largest company has been accused of lying to its owners. In the past Nokia has defended itself successfully against similar allegations. In fact, it is rare for such accusations to be proved in court. Sometimes, though, it becomes obvious that a company was lying. How can this happen?

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