French prosecutor: Ex-Vivendi chief Messier should be acquitted of charges of duping investors

Prosecutors: ex-Vivendi chief should be acquitted

PARIS — A French prosecutor asked a court Wednesday to acquit former Vivendi CEO Jean-Marie Messier and other ex-executives of misleading investors about their indebted company.

Prosecutor Chantal de Leiris told the Paris court that the problems at Vivendi were not “a generalized fraud orchestrated” by Messier and other former executives. She said the executives did not have enough information about the company’s health but did not intentionally dupe anyone.

De Leiris also asked the court to acquit Edgar Bronfman Jr., a former top executive at Vivendi Universal who is now CEO of Warner Music Group. He is charged with insider trading.

The prosecutor’s office had initially recommended that the case be dropped. However, in France it is the investigating judge who decides whether charges should be brought, and therefore whether a trial is warranted — as in this case.

The once high-flying, jet-setting Messier is charged with “transmitting false or misleading information” about the company from 2000-2002 and “manipulation of stock prices” in 2001 as well as misuse of company assets for a euro20 million severance package that he eventually renounced.

“The Vivendi affair is not the Enron affair,” de Leiris said, asking the court for the acquittals in the third week of the trial. “It is not a general fraud orchestrated by Jean-Marie Messier or Guillaume Hannezo,” chief financial officer at the time. There was no intent to diffuse incorrect information, she said, asking in addition for acquittal for five others on trial.

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.

However, Vivendi’s shares lost more than 80 percent of their value as the company ran up billions of dollars of debt in making 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 euro35 billion in debt — prompting the company to sell off many of its businesses, including Universal, to right itself.

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

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 a civil party in the case, alongside shareholders.

The trial continues through Friday with a verdict at a later date. Messier could face up to five years in prison and euro350,000 in fines if convicted.