Former Vivendi CEO Messier, other executives accused of duping investors in French trial

Ex-Vivendi execs face French trial over finances

PARIS — The once-jetsetting Jean-Marie Messier, who transformed a stodgy water company into media giant Vivendi Universal, went on trial in Paris on Wednesday on charges he misled investors about the company’s health as it took on billions of dollars of debt and neared bankruptcy.

Messier is on trial with six others, including American Edgar Bronfman Jr., a former top Vivendi executive and now CEO of Warner Music Group. Messier could face up to five years in prison and €350,000 in fines if convicted.

In the courtroom, Messier showed contrition and admitted to mistakes — but insisted that his strategic decisions were made in the interest of the company.

“Did we make errors in strategy? Yes, without a doubt. As director, I take responsibility for them,” he said, acknowledging a failure to anticipate technological troubles in the media world.

“Certain decisions that I was able to take — that we were able to take collectively — turned out not to be the best ones,” Messier added.

Messier, once the golden boy of French business, said he gained in 2002 a reputation for “an excess of provocation.” That was a reference to his quip that France’s “cultural exception” was dead, which inflamed many highbrow French artists and intellectuals.

The trial is Act Two in the courtroom drama for Vivendi, after a similar trial in New York. The U.S. District Court in Manhattan ruled in January against Vivendi SA and in favor of U.S. and European shareholders who said the media group lied to the public about its shaky finances. The court ruled that Messier himself was not liable.

In the French case, Vivendi SA is itself one of the plaintiffs, alongside shareholders.

The French investigation began in 2002. Investigators looked into shareholder accusations that the company published false balance sheets for the fiscal years 2000 and 2001 and issued deceptive information about its forecasts.

After years of probing, Paris prosecutors recommended last year that the case be thrown out for lack of evidence. But the judge ignored the recommendation and ordered Messier and six others to stand trial.

The others are Bronfman, a former executive vice president; former Chief Financial Officer Guillaume Hannezo; ex-treasurer Hubert Dupont-Lhotelain; ex-assistant treasurer Francois Blondet; former managing director Eric Licoys; and a former president of a now-defunct branch of Deutsche Bank, Philippe Guez.

Messier, now 53, was a star of the French business world during his 1996-2002 reign at Vivendi, when the company expanded from the water utility Generale des eaux into a major media group. He was revered as the embodiment of a new entrepreneurial culture and market savvy taking root in France.

Vivendi’s shares lost more than 80 percent of their value as the company ran up billions of dollars of debt in acquisitions including the Universal film studios and music label in the United States, European pay-TV station Canal Plus, a French publishing arm and France’s No. 2 mobile operator.

By the time Messier left, Vivendi Universal was swamped under €35 billion in debt — prompting the company to sell off many of its businesses, including Universal, to right itself.

At the height of Vivendi’s buying binge, France’s popular satirical puppet show, “Guignols de l’info,” had a character dubbed “Jean-Marie-Myself-Master of the World-Messier.”

Messier was sacked by Vivendi’s board of directors in 2002 and the company underwent drastic restructuring.

Messier is charged with “transmitting false or misleading information about the prospects or situation of a stock issuer” from 2000 to 2002, “manipulation of stock prices” in 2001 and “misuse of company assets” for a €20 million severance package that he eventually renounced.

Bronfman is accused of insider trading.

Messier “is determined to show the inequality” of the charges, his lawyer Pierre Haik told The Associated Press before the trial.

Messier was already fined €1 million by the French stock market regulator, the AMF, for giving inaccurate financial information about his company. A Paris appeals court later halved that to €500,000.

The trial runs through June 25.