Messier bailed in suspect stock trades probe

23rd June 2004, Comments 0 comments

PARIS, June 23 (AFP) - Jean-Marie Messier, the former head of Vivendi Universal now under formal investigation, confronted allegations Wednesday of stock market rigging by the French media giant during his tenure.

PARIS, June 23 (AFP) - Jean-Marie Messier, the former head of Vivendi Universal now under formal investigation, confronted allegations Wednesday of stock market rigging by the French media giant during his tenure.

Messier, 47, who had been in police custody for 36 hours, was freed on bail overnight after the move by French investigating magistrates, leaving him one step shy of formal charges.

He is suspected of stock market manipulation, disseminating false information and fraud.

French investigators are probing several events during Messier's tumultuous term, which took Vivendi from a simple utilities company to an international media empire flirting with bankruptcy.

Suspicions center on a massive share buyback after the September 11 attacks of 2001, possible insider trading by Vivendi directors the following December,  financial disclosures and the consolidation of partly-owned telecommunications units in Vivendi's accounts.
Messier, who was forced out of Vivendi two years ago, nonetheless escaped accusations of insider trading.

He was questioned Tuesday for more than four hours by the judges, posted bail of EUR 1.35 million (USD 1.6 million) and was ordered not to contact four other executives also under investigation.

After his release from what a police union has dubbed the financial brigade's "jet-set apartment", Messier issued a statement regarding accusations against him, saying the post-September 11 share buyback had been in the shareholders' interest.

The US Securities and Exchange Commission had authorised such buybacks in "unlimited volumes" at the time to stabilise fragile markets, Messier noted.

The SEC's French counterpart had taken similar measures as early as September 12, he added.

Stressing that he had demanded to be placed under investigation on March 29, Messier insisted he had not personally benefitted from the various actions now being probed.

Vivendi had expanded at a breakneck pace by relying on massive loans to finance acquisitions and his successor Jean-Rene Fourtou was forced to sell off huge chunks of the group to stem the flow of red ink.

Vivendi spent more than EUR 6 billion to buy back around 104 million of its shares in 2001, including many after September 11, according to the Wall Street Journal.
Some of those operations took place two weeks before the company released half-year results however, a violation of French financial law.

The group is also 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 an association representing small shareholders.

Finally, investigators charge that 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 SEC under which Vivendi agreed to pay a USD 50 million civil penalty to settle charges of defrauding shareholders.

As part of the deal, Messier agreed to forgo a EUR 21 million severance package.
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.

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


© AFP

Subject: French news

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