France to fight US over Executive Life

3rd December 2003, Comments 0 comments

PARIS, Dec 3 (AFP) - France and the United States were poised Wednesday to fight a court battle in the Executive Life affair after California prosecutors failed to reach a settlement with French business tycoon Francois Pinault.

PARIS, Dec 3 (AFP) - France and the United States were poised Wednesday to fight a court battle in the Executive Life affair after California prosecutors failed to reach a settlement with French business tycoon Francois Pinault.

The French government rejected any accord that did not include all French parties involved in the scandal - including Pinault and his holding company Artemis.

The collapse of settlement talks late Tuesday left the French government resigned to face a potentially costly trial after months of delicate negotiations.

French government spokesman Francois Cope said: "The Prime Minister (Jean-Pierre Raffarin) believes that if there must be a trial, there will be a trial."

On Tuesday US prosecutors, left exasperated by months of fruitless talks, said they would pursue a criminal probe into then-public French bank Credit Lyonnais' purchase of US insurer Executive Life, opening the way for criminal charges to be filed against the French parties and possibly a trial.

"Further discussions at this time would be unproductive and further delay could prejudice our investigation," said US Attorney's spokesman Thom Mrozek in Los Angeles.

"Accordingly, we will now push forward toward a conclusion of our investigation," he said.

The collapse of settlement talks left some French officials fuming.French member of parliament, Francois d'Aubert, who himself once led an investigation into Credit Lyonnais, accused US authorities of extortion.

*"We are witnessing an attempt by Californian authorities to extort money, to blackmail the French state, French companies and banks," he said on French radio station Europ 1.

Credit Lyonnais, which is now a subsidiary of French bank Credit Agricole, stands accused of illegally concealing its 1993 acquisition of the failed California insurance company.

Talks on reaching a settlement had dragged on for months and had missed repeated deadlines, with several versions of a deal having failed to satisfy all parties.

Criminal charges could lead to a long, complex and embarrassing trial or -- more likely - to a plea bargain that could result in Credit Lyonnais losing its precious US banking licence.

US prosecutors have a sealed criminal indictment handed down by a grand jury in Los Angeles in July that could force a long and diplomatically thorny trial that would come at a tough moment in US-French relations.

But they could also file criminal charges against those suspected of involvement in the decade-old affair without unsealing the indictment.Credit Lyonnais is accused of having acquired the insurer through the intermediary of French insurer MAAF at a time when US law barred a bank and foreign governments from holding more than 25 percent of an insurance company.

French billionaire Pinault's holding company Artemis later acquired Executive Life, which it re-named Aurora.

A US source close to the matter have said the failure to reach a settlement hinged on how much Pinault should pay.

The spokesman for the French government, which had been seeking a blanket settlement protecting all the French parties involved in the case, insisted that it had aimed to protect the interests of the French taxpayer and not Pinault, who is a friend of French President Jacques Chirac, although some politicians complained of cronyism.

© AFP

                                                                Subject: French news

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