The proof of Corollary 1.7 is fine. I had misunderstood his proof. His proof uses in a crucial way his assumption (ii) which appears on the top of p. 41. As is explained on p. 41, this assumption implies that the Groessencharacter $\psi$ associated to E/F (a Groessencharacter on F) comes from a Groessencharacter $\varphi$ on K of type $(1,0)$. Le me just repeat de Shalit's argument in a hopefully slightly more detailed way: (1) We have $[F[E[{\frak{m}}]]:F]\leq \# (\mathcal{O}_{K}/\frak{m})^{\times}$, $K({\frak{g}})=F(E[{\frak{g}}])$ (from his Proposition 1.6) and $K({\frak{m}\frak{g}})=F[E[{{\frak{m}}}]]\cdot K({\frak{g}})=K(E[{\frak{m}}{\frak{g}}])$ (again from his Proposition 1.6) (2) The key observation now is that the set of roots of unity of $F[\frak{g}]$ which are congruent to $1$ modulo $\frak{g}$ is reduced to $\{1\}$. This comes from our assumption that the conductor of $\varphi$ divides $\frak{g}$ and that $\varphi$ has type $(1,0)$ (I had missed the type $(1,0)$ assumption initially). From (2), it follows that (3) $[ K( {\frak{m}} {\frak{g}} ) : K ({\frak{g}}) ]=\# (\mathcal{O}_{K}/\frak{m})^{\times}$. The result now follows by incorporating (1) and (3) into the Hasse diagram which appears below his Corollary 1.7. Note that (a) the linear disjointness of $F(E[\frak{g}])$ and $F(E[\frak{m}])$ over $F$ and the equality (b) $[F[E[{\frak{m}}]]:F]=\# (\mathcal{O}_{K}/\frak{m})^{\times}$ are proved simultaneously!