Chrysler has no plans to alter a deal with Martha Stewart Omnimedia following revelations that the billionaire homemaking guru who owns 60% of the company is being investigated over alleged insider trading.
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Last April, DaimlerChrysler’s Chrysler Group announced “an extensive multimedia marketing programme” with Martha Stewart Living Omnimedia that would promote its cars and minivans “through MSO’s award-winning array of print, TV, radio, online media and special events”.
“The multimedia marketing agreement between the Chrysler brand and Martha Stewart Living Omnimedia remains viable and we have no plans to change what we feel is a very good programme,” a Chrysler spokesman told just-auto.
Last week, reports said that Martha Stewart was facing questions over news that she sold 4,000 shares in a disgraced drug company called ImClone Systems a day before its “wonder” cancer treatment was rejected by watchdogs.
Stewart had claimed that she told her broker to automatically sell the shares if they dipped below $US60, as discussed in November.
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By GlobalData
However, the broker’s employer, Merrill Lynch, subsequently suspended him, saying it had found evidence that other factors were the “sale trigger”.
Stewart has reportedly said that she expects to be quickly exonerated of the allegations.
Shares in Martha Stewart Living Omnimedia plunged more than 20% to $US12.71 earlier this week as investors appeared to think the developments in the controversy would damage a business that relies heavily on the ‘squeaky clean’ image of the chief executive, the Daily Telegraph noted, adding that Stewart’s stake in the company was now worth less than $400 million, down from $700m when the company shares were at the year’s high of $23.50.
The British newspaper was not unsympathetic, however, saying in a business opinion column: “It is notoriously difficult to prove insider dealing and [Martha Stewart] was hardly the only one to have suspicions about [ImClone Systems].
“But it says something about the state of paranoia in corporate America when owning shares and selling them is enough to put your integrity in doubt.”
To add to Martha Stewart’s woes this week, 80,000 ceramic potpourri simmering pots sold under her ‘Everyday’ brand were recalled because of a risk they could scald users. Tea lights inside the pot overheat and some have caused burns, the Telegraph said.
