Billionaire investor Kirk Kerkorian was not defrauded by Daimler-Benz in its 1998 combination with Chrysler and held company shares too long while their value dropped, lawyers for DaimlerChrysler AG told a judge yesterday.

Mr. Kerkorian is trying to victimize DaimlerChrysler stockholders by making them pay for his investment error, Jonathan Lerner, an attorney for the world's fifth-largest car maker, told U.S. District Judge Joseph Farnan Jr., who is presiding over a trial of a suit Mr. Kerkorian filed in 2000 alleging that the German auto maker deceived him about the transaction's true nature.

"This case is about DaimlerChrysler's sagging share prices and an investor who held onto his shares too long," Mr. Lerner said in opening arguments. The judge is hearing the case in federal court in Wilmington without a jury.

Mr. Kerkorian is seeking as much as $3-billion (U.S.) in damages over stock losses tied to DaimlerChrysler's creation.

The $36-billion combination hasn't boosted share values as the company had predicted. DaimlerChrysler's shares have fallen 55 per cent since the transaction was completed in November, 1998.

The company's U.S. shares, which have risen 6.4 per cent over the past 12 months, rose 67 cents to $38.71 in New York Stock Market composite trading yesterday.

In their opening statements yesterday, Mr. Kerkorian's lawyers said Daimler engaged in "plain, old fashioned fraud" by painting the combination as a merger of equals rather than a takeover.

"Because of their lies, they were able to take control of Chrysler, drive out senior leadership and replace them with Daimler-Benz executives from Germany," said Terry Christensen, who is representing Mr. Kerkorian.

Mr. Kerkorian was once Chrysler's largest shareholder, owning as much as 13.75 per cent of what was the No. 3 U.S. car maker.

DaimlerChrysler officials said earlier yesterday that they'd be willing to negotiate with Mr. Kerkorian to settle the dispute if approached by the investor.

"If they come to us, we would talk," a spokesman said.

Outside the courtroom yesterday, Mr. Christensen said there were no settlement talks going on. Still "no one ever closes the door on any alternative," he said.

The company agreed in August to pay $300-million to smaller Chrysler shareholders to resolve their claims that Daimler officials characterized the combination as a merger to win approval from U.S. regulators, investors and employees.

The 86-year-old Mr. Kerkorian, the controlling shareholder of the Metro-Goldwyn- Mayer Inc. movie studio and the MGM Mirage casino in Las Vegas, is expected to take the witness stand today.

Judge Farnan has set aside three weeks for testimony in the case. The judge indicated last week that he wouldn't issue a decision until at least February.