June 6, 2012 / 4:43 PM / in 5 years

NDS says Cisco deal on track despite allegations

The Cisco logo is displayed at the technology company's campus in San Jose, California February 3, 2010.Robert Galbraith

TEL AVIV (Reuters) - Cisco's $5 billion acquisition of pay-TV smartcard maker NDS is on track despite the emergence of new allegations since the deal was announced that NDS used illegal means to undermine competitors, NDS's executive chairman told Reuters.

"The due diligence was obviously over when we did the sale and purchase agreement," Abe Peled said on the sidelines of a cyber security conference in Tel Aviv on Wednesday.

Asked whether Cisco had sought variations in terms or indemnities, he answered: "There is no change since we announced the deal."

A BBC Panorama documentary broadcast in March, two weeks after News Corp and private equity firm Permira agreed to sell NDS to Cisco, alleged that NDS had hired a consultant to post the encryption codes of ITV Digital on his website.

Widespread piracy after the online publication of the codes contributed to the 2002 collapse of ITV Digital, which was a key rival of Sky TV, the precursor to BSkyB, which is 39 percent owned by News Corp.

"We are completely satisfied that there were no issues ever done by any NDS employees," Peled said.

He added that regulatory approval for the sale to Cisco was expected in the fall.

NDS was faced with a $3 billion lawsuit in 2002 from Canal Plus, which had supplied the scrambling technology for ITV Digital and accused NDS of extracting the code from the cards and leaking it onto the Internet.

Canal Plus dropped the action in 2003 when News Corp bought Italian satellite pay TV company Telepiu from Canal Plus's then debt-stricken owner Vivendi.

U.S. satellite TV provider EchoStar, which had tried to join the Canal Plus suit, then sued NDS in 2003 in a similar case. NDS was cleared of the main charges.

Reporting by Tova Cohen; Editing by Georgina Prodhan and Hans-Juergen Peters

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