This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.
Legal
Former Vivendi boss due in Paris court
By CMU Editorial | Published on Wednesday 2 June 2010
The former boss of Vivendi, the parent company of Universal Music, is due in a Paris court today to face allegations he misled investors, manipulated his company’s share price and misusing corporate assets, resulting in the near collapse of the conglom eight years ago.
Jean-Marie Messier led Vivendi from 1996 to 2002, expanding the one time water company’s media and communications operations, most notably through the 2000 acquisition of Seagram’s entertainment business, aka the Universal empire, including Universal Music.
Shortly after the acquisition of Universal, and the rebranding of the parent company to Vivendi Universal, everything started to go wrong for the French-based conglomerate, amid various allegations of dodgy dealings on Messier’s part.
He was eventually kicked out of the top job, and his replacement, Jean-Rene Fourtou, set about rescuing the company, in part by selling off a bulk of the Universal entertainment empire to NBC, though he retained the music company.
The allegations against Messier relate to the period 2000 to 2002. France’s financial regulator investigated the allegations back in the day, fining the former Vivendi chief a million euros in 2004 for misconduct, though the fine was later halved. Subsequent civil action against Messier and Vivendi in the US found the latter liable for misleading investors, but let Messier off for personal liability (Vivendi plan to appeal that ruling).
The latest court hearing relates to the criminal investigation into Messier’s conduct. After seven years of investigations, Paris prosecutors actually recommended the case against the former Vivendi chief be dropped last year, but a French judge insisted the case got to court. Messier could face a five year jail term if found guilty of all the charges against him. And, unlike in the US civil case, Vivendi itself is not accused this time, and could push for damages itself if Messier were to be found guilty.
So, all very interesting, given Vivendi’s ownership of Universal Music. But, as previously reported, even more interesting for music business types because two other executives with involvement in Vivendi between 2000 and 2002 are also accused of some dodgy dealings.
And they include a certain Edgar Bronfman Jr, now boss man at Warner Music, but then Vice-Chairman of Vivendi having previously been in charge at Seagram before its acquisition by the French firm in 2000 (Seagram having been the Bronfman family’s business for seventy years). Bronfman is accused of some insider dealing regards his Vivendi shares at the time.
The allegations against Bronfman in the Parisian trial are a nominal side-show really, but Warner Music’s share price in the US fell dramatically yesterday, and some commentators reckon that was related to today’s court date.
The trial is expected to last up to four weeks. Both Messier and Bronfman deny the charges made against them.
