Jury mulls Pinault verdict in US fraud trial

19th April 2005, Comments 0 comments

LOS ANGELES, April 18 (AFP) - A US jury on Monday began weighing whether one of the world's richest men, French tycoon Francois Pinault, conspired to buy the illegally acquired assets of a failed California insurer.

LOS ANGELES, April 18 (AFP) - A US jury on Monday began weighing whether one of the world's richest men, French tycoon Francois Pinault, conspired to buy the illegally acquired assets of a failed California insurer.

After seven years of legal wrangling and a complex - sometimes mind-numbing - two-month trial, the panel in Los Angeles retired to begin considering its verdict in the multi-billion-euro lawsuit over the 1991 acquisition by French investors of US insurer Executive Life.

Pinault and his holding company Artemis are accused of being complicit in a 3.7 billion (EUR 2.8 billion) fraud surrounding the takeover of Executive Life by French investors led by the then state-owned bank Credit Lyonnais.

California's Insurance Commissioner John Garamendi alleged in his suit that Artemis had acquired Executive Life's insurance business and part of its 3.25 billion (EUR 2.49 billion) junk bond portfolio as part of a plot to disguise the illegal acquisition of the California firm.

The suit claims that Credit Lyonnais used French insurer MAAF as a front to buy Executive Life, violating a California law barring foreign governments from controlling insurance companies. In addition, a US federal law banned banks from owning more than 25 percent of a non-banking business.

The suit claimed that the French investors disguised the fact that the then state-controlled Credit Lyonnais was behind the deal and that they later in 1994 sold off key parts of Executive Life's assets to Artemis as part of the elaborate cover up.

Garamendi claimed in his suit brought on behalf of around 330,000 former Executive Life policy holders that he never would have sold the firm to the French investors if he had known Credit Lyonnais was behind the operation.

His suit accuses Artemis - and Pinault - of making billions of dollars in profit from the allegedly ill-gotten Executive Life junk bonds when their value shot up in the late 1990s.

© AFP

Subject: French News

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