A French judge has order seven executives at Vivendi to stand trial over alleged financial wrong doing. The executives include Jean-Marie Messier, Edgar Bronfman Jr and Guillaume Hannezo (former Chief Financial Officer). Reuters has reported that the charges include divulging misleading information, stock price manipulation and misuse of corporate funds.
Messier was Chairman and CEO of Vivendi from 1994 until his dismissal in July 2002. He received a severance package of €20.5m when his employment was terminated. Under his tenure, Vivendi embarked on an acquisition spree but ended up racking up massive debts and started to report losses. Brongman’s emplyment was terminated at his request in September 2002. Lawyers for both Messier and Bronfman Jr said their clients denied the charges.
Vivendi has issued a brief statement, noting that it ‘joined in these proceedings as a civil plaintiff on October 2002 and has fully co-operated with the judicial authorities since the beginning. Vivendi and its counsel are reviewing the Order’.
In other proceedings relating to the same time period, earlier this month a New York court began considering a class action lawsuit against Vivendi. Investors bringing the suit allege they were given false and misleading statements by the company, its then chief executive and Guillaume Hannezo, former chief financial officer, about Vivendi’s liquidity position and overall performance between 2000 and 2002.
In 2003, Vivendi agreed a settlement with the SEC in the US in which they agreed to pay $50m to 12,000 investors, without any admission of guilt. The French regulator AMF has recentl confirmed following appeal a (reduced) fine on the company of €0.5m in relation to breaches of rules on financial communications between 2000 and 2002.
Reuters/New York Times: Messier, Bronfman Told to Stand Trial In Vivendi Case
Financial Times: Former Vivendi executives face trial