Former Chrysler chief financial officer Gary Valade has told a special master he didn't know why some of his notes on the 1998 deal negotiations with Daimler-Benz AG went missing from the documents handed over to suing shareholder Kirk Kerkorian, Dow Jones reported.

The report said Valade took the stand in a special hearing ordered on Tuesday last week by US District Judge Joseph Farnan after 61 pages of notes from his file were turned over to Kerkorian's lawyers on the eve of his scheduled testimony in Kerkorian's lawsuit against DaimlerChrysler AG.

Dow Jones said the notes, unsealed at the request of DaimlerChrysler on Monday, date back to the earliest talks between the American and German car makers in the spring of 1998.

Dow Jones noted that Valade was blocked from testifying on the substance of the notes at the Monday hearing, which was called to probe why his handwritten deal notes didn't show up until the trial of Kerkorian's lawsuit was in its final days.

Dow Jones recalled that the lawsuit claims the billionaire investor was duped into backing the deal by alleged false representations that the combination was a merger of equals. What the term "merger of equals" meant to Chrysler executives negotiating the deal has been a central theme of the trial, which is expected to resume in January, the report added.

Dow Jones said Valade's notes appear to show Chrysler executives were concerned that the deal not be viewed as a takeover - so concerned that they were willing to accept a lower premium over the stock price.

Dow Jones said that, until Monday, only the lawyers and Judge Farnan had seen the material, which has been sealed by the judge, though DaimlerChrysler on Monday asked the notes be made public - quoted excerpts were in arguments over what price the company should pay for failing to turn the documents over earlier during the two years the Kerkorian case was being readied for trial.

Kerkorian's attorneys have asked that Valade be kept from testifying and the documents themselves be used as evidence, Dow Jones said, adding that DaimlerChrysler said the omission was inadvertent, and the notes were handed over as soon as lawyers realised they had been overlooked.

Valade reportedly testified he gave all his notes, including the handwritten record of early deal talks, to lawyers early on and company lawyers established his 61 pages of notes went into the discovery process but failed to appear for production to Kerkorian on time.

Dow Jones said that, among the documents brought to light is a listing of concerns on the notepaper of ousted executive Thomas Stallkamp, including two underlined entries which read, "Sell out for profit" and "Senior Mgt sold out."

The news agency noted that Stallkamp, the first US chief in the post-merger company, was fired after a series of clashes with DaimlerChrysler chief executive officer Juergen Schrempp.

According to the report, DaimlerChrysler's law firm blamed outside copying and stamping services in Michigan and New York for 'mishandling' documents submitted by Valade.

The court-appointed hearing officer also inquired into the law firm's practices of flagging "hot" documents involving particularly sensitive material that was to be handed over to litigation adversaries, Dow Jones said.

Kerkorian lawyer William McGuiness reportedly said pieces of the Valade notes - which started out in a single binder - were misidentified and buried in other apparently unrelated documents from DaimlerChrysler's human resources and legal departments.

Dow Jones said most of the 61 pages that stopped the trial weren't handed over until last week, an omission that Kerkorian's lawyers say tainted the entire trial, while, in addition to the notes discovered on Tuesday last week as the trial neared what was supposed to be its close, DaimlerChrysler has found another six pages of new evidence.