Executive Life 'made Pinault USD 800m'

17th December 2003, Comments 0 comments

PARIS, Dec 17 (AFP) - French businessman Francois Pinault made a profit of USD 800 million (EUR 650 million) on junk bonds connected with the allegedly fraudulent purchase of a US insurer by a French bank, his son said Wednesday.

PARIS, Dec 17 (AFP) - French businessman Francois Pinault made a profit of USD 800 million (EUR 650 million) on junk bonds connected with the allegedly fraudulent purchase of a US insurer by a French bank, his son said Wednesday.

"If you deduct the costs, USD 800 million between 1992 and 2000," Francois-Henri Pinault said in response to a question during an interview to appear Thursday in the French weekly L'Express but released in advance.

The younger Pinault is president of Artemis, the holding company that runs the family empire that includes Aurora, an insurance company that was once the now bankrupt California insurer Executive Life.

In 1992, Francois Pinault bought a portfolio of high-risk bonds from the Credit Lyonnais bank that had been acquired a year earlier from Executive Life following an offer from the California insurance authorities, Francois-Henri Pinault said.

Faced with US legislation forbidding a bank to own more than 25 percent of a commercial or industrial business, Credit Lyonnais directors offered to sell the bonds to the elder Pinault.

"It was he, betting on a rebound of the American economy, who decided to do the deal, betting his entire fortune at the time," the son told L'Express, adding that the operation had allowed his father "to turn a pretty profit".

Three years after buying the bonds, Artemis bought Executive Life itself, snarling the holding group in a dispute that has opposed for several years US justice officials and several French entities, including Credit Lyonnais, the French state - which owned the bank at the time - and the insurance group Maaf.

On Monday, the French finance ministry announced that all sides had agreed to a deal under which the French parties would pay USD 770 million to end a dispute over the purchase of Executive Life by Credit Lyonnais, a transaction US officials charge was illegal.

© AFP

                                                                Subject: France news

 


 

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