DHL ordered to hand over documents in U.S. probe
A judge has ordered DHL Worldwide Express, the U.S. arm of DHL Express, to hand over documents requested by FedEx Corp. and United Parcel Service in the investigation into the ownership of Astar Air Cargo, formerly DHL Airways.
Some of the documents sought by FedEx and UPS involve the financial relationship between Brussels-based DHL International, and William Robinson, the former principal owner of DHL Airways.
In July the airline was bought by a group led by John Dasburg, Astar’s chairman and chief executive. The order also orders DHL to produce documents detailing the terms of the purchase agreement between Dasburg, Robinson and DHL.
FedEx and UPS allege that Astar is controlled by DHL International and its parent, Deutsche Post World Net, the German mail and logistics company. Federal law requires that domestic airlines operating between points within the U.S. be controlled by U.S. citizens. The two U.S. express giants contend that Dasburg and his partners got a sweetheart deal for DHL.
The decision earlier this week by Department of Transportation Administrative Law Judge Burton Kolko does not necessarily mean that he will admit the documents into the record since the inquiry is officially limited to Astar’s ownership. FedEx and UPS had hoped that the hearing would also seek to determine whether DHL International illegally controlled the airline while Robinson was majority owner.
But access to the financial documents will enable FedEx and UPS to probe more deeply into the extent of DHL International’s relationship with Astar. The Miami-based carrier operates 40 freighter aircraft on U.S. domestic routes. About 90 percent of its traffic is provided by DHL Worldwide Express.
In earlier testimony this week, Paul Walker, a former banker with Chase Manhattan, testified that he did not believe Boeing Capital would have provided a $50 million loan to the Dasburg group without the support and guarantee of Deutsche Post.
John Finnerty, another witness called by FedEx and UPS, told the hearing on Tuesday that DHL Airways’ value on the day it was sold was approximately $140 million, as contrasted to the official purchase price of $57.6 million paid by Dasburg and his partners, Richard C. Blum, a San Francisco investment banker, and Michael R. Klein, a partner in the Washington-based law firm Wilmer, Cutler & Pickering,
In other developments this week, Judge Kolko said he would read the transcript of Robinson’s deposition in late August and then decide whether to call the reclusive Idaho-based investor as a witness in the hearing. An order from a federal district judge ended Robinson’s refusal to testify about his involvement in the management of DHL Airways and his financial relationship with DHL International.
The hearing was scheduled to resume this morning with testimony from Brian Campbell, an aviation economist and consultant. Once that is completed, the proceedings will adjourn until Sept. 23.
