Ex-Vivendi chief Messier quizzed for second day

22nd June 2004, Comments 0 comments

PARIS, June 22 (AFP) - Jean-Marie Messier, the brash former head of Vivendi Universal, was to be grilled Tuesday by judges who could formally place him under investigation for fraud allegedly committed while he ran the French media group.

PARIS, June 22 (AFP) - Jean-Marie Messier, the brash former head of Vivendi Universal, was to be grilled Tuesday by judges who could formally place him under investigation for fraud allegedly committed while he ran the French media group.

Messier, summoned by French financial police a day earlier, could join four others in finding himself one step shy of formal charges, but might also be released under judicial control once a 48-hour period has expired.

French investigators led by magistrates Henri Pons and Rene Cros are probing four events during Messier's tumultuous term, which took Vivendi from a simple utilities company to a media empire flirting with bankruptcy.

Suspicions centre on a massive share buyback following the September 11 terror attacks, possible insider trading by Vivendi directors in December 2001, financial disclosures and the consolidation of three partly-owned telecommunications units in Vivendi's accounts.

According to Messier's lawyer Olivier Metzner, Messier holds "a certain number of documents he believes may help provide detailed and precise responses to investigators' questions".

The former Vivendi chief, Metzner added, want to provoke an investigation "in order to explain his position and better defend his former colleagues".

One of the four others implicated in the affair is former Vivendi financial director Guillaume Hannezo.

Hannezo is under investigation for possible insider trading, stock market manipulation and disseminating false information.

The chairman of Deutsche Bank's stock broking operations in France, Philippe Guez, is under investigation as well.

Vivendi spent more than EUR 6 billion (USD 7.2 billion) buying back around 104 million of its shares in 2001, many of which were acquired after the September 11 attacks, according to the Wall Street Journal.

The move came two weeks before the company released half-year results, a violation of French financial law.

Messier and Hannezo then exercised stock options in December 2001 ahead of a sale by Vivendi of the shares it had bought.

But while Hannezo earned a tidy profit, Messier held on to much of his stock and eventually posted big losses, the Journal said.

Meanwhile, the group is alleged to have issued false estimates of financial perspectives for 2001 and 2002. The French probe was launched in October 2002 following a complaint by the small shareholders association APPAC.

Finally, investigators charge Vivendi fully consolidated the results of partly-owned telecom units Cegetel, Morocco Telecom and Elektrim, tainting the true picture of the group's financial plight.

In December, Vivendi and Messier reached an agreement with the US Securities and Exchange Commission under which Vivendi agreed to pay a USD 50 million (EUR 41.6 million) civil penalty to settle charges of defrauding shareholders.

But the company and Messier still face a class action lawsuit in the United States, and sanctions by the SEC's French counterpart, the Financial Markets Authority, in addition to consequences of the probe by judges Pons and Cros.

On Tuesday, the head of the French shareholders' defence group Adam urged media to also look at the role of members of Vivendi's supervisory board.

"You should not limit yourselves to Jean-Marie Messier alone," said Colette Neuville.

"The responsibility of Vivendi's supervisory board is certain and no one is talking about that any more."

Messier was ousted as Vivendi chairman in July 2002 after his attempts to turn the water group Compagnie Generale des Eaux into a global entertainment empire collapsed, leaving what had become Vivendi Universal with EUR 35 billion in debt.

Of that, Vivendi's water unit Vivendi Environnement accounted for EUR 19 billion. The company has since been sold.

Neuville said small shareholders would rather get financial compensation than see Messier punished.

She accused media of ganging up on the scrappy financier now that he was on the ropes, saying "don't fire on the ambulance".

© AFP

Subject: French news

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