HP chief denies influence claims

Carly Fiorina: First witness to testify

Hewlett-Packard chief executive Carly Fiorina has denied she attempted to blackmail Deutsche Bank into backing her drive for merger with computer maker Compaq.

Ms Fiorina, appearing as the first witness in a trial bought by disgruntled shareholder Walter Hewlett, said there was no attempt to exploit a $1m bonus offer as a means of attempting to sway Deutsche Bank behind the merger.

Deutsche Bank, besides owning millions of HP shares, undertakes advice work for the tech giant.

Mr Hewlett, who has sought to scupper the HP/Compaq tie-up since it was announced seven months ago, has bought the trial in an effort to declare void a shareholder vote which appears narrowly to have approved the tie-up.

'Sense of urgency'

Ms Fiorina admitted she had contacted many big HP shareholders about the vote.

"This was a complex merger and a controversial merger," she said.

But she said it would have been "improper" to abuse the Deutsche Bank relationship.

When asked about a voice message in which she said HP had to do something "extraordinary" to win the bank's support, Ms Fiorina said:

"I was trying to convey a sense of urgency ... maybe get on a plane, talk to institutions about process, maybe allay fears about Compaq."

Deutsche Bank said, in a statement, that it voted in the best interests of shareholders, and that executives were "not influenced by an banking relationships with Hewlett-Packard".

Figures dispute

Stephen Neal, one of Mr Hewlett's legal team, also accused HP executives of failing to tell shareholders of internal estimates showing lower gains from the merger than had been publicised.

"That in itself should cause this vote to be thrown out," Mr Neal said.

Ms Fiorina said that the lower figures were a "model", rather than a projection, and said that figures given to shareholders had been "subject to industry trends".

HP lawyer Steven Schatz said there was no basis for the case, and accused opponents of dragging HP executives "through the mud on speculation".

The hearing, before a judge who is a business law, is expected to last for three days.