P.M. BRIEFING : Equity OKs Cummins ‘Hands Off’

The Hong Kong investment firm Industrial Equity (Pacific) Ltd. has agreed to refrain from launching a future takeover attempt of Cummins Engine Co. as part of a settlement of civil suits between the two companies, it was announced today.

Industrial Equity, which has a nearly 15% stake in Cummins, had sued the diesel engine maker to win a seat on its board of directors.

The suit named Cummins and six of its directors, including Chairman Henry B. Schacht, alleging the six “manage not for the benefit of its shareholders and its other corporate constituencies, but to enhance their own personal power and prestige.”

Cummins also filed suit to force Industrial Equity to sell its 1.9 million shares of Cummins stock. It claimed the Hong Kong firm violated state and federal securities laws in acquiring its stake in Cummins and was pressuring the company for a seat on the board.