Ex-Vivendi Chief Faces June Trial

Former Vivendi chief exec Jean-Marie Messier will stand trial in June on charges of misleading investors while he was at the helm.

Messier made seismic shifts in the company strategy, transforming it from a water utility into one of the world’s biggest media companies with interests in film, music and pay TV.

Messier and six other former top Vivendi executives including Edgar Bronfman Jr. and former chief financial officer Guillaume Hannezo were ordered to stand trial following an investigation sparked by complaints from investors claiming they were misled into buying or holding Vivendi stock.

The probe into the activities of Vivendi execs started in 2002.

Bronfman was chief exec of Seagram Co. when it merged with Vivendi in 2000, and he served as executive vice chairman of the merged business until he resigned in March 2002. He remained with the company as a consultant and vice chairman of its board after his resignation.

Last year Vivendi, Messier and Hannezo went on trial in U.S. District Court, accused of hiding the company’s precarious financial condition in the two years leading up to the probe. The jury in that case began deliberations two weeks ago. The company says it acted properly.

When Messier was running Vivendi it embarked on a huge acquisition spree, although the company’s shares lost more than 80 percent of their value as the company ran up billions in debt. The big buyouts included Universal film studios, various global record labels, European pay-TV station Canal Plus, a French publishing arm and the country’s No. 2 mobile operator.

Faced with 2002 losses of euro 23.3 billion, it sacked Messier and later underwent a fire sale that included the Universal film business. The company restructured under new chief exec Jean-Rene Fourtou.

Fortou, who was faced with the task of breaking up the empire to reduce the debts, was himself cleared of insider trading in 2006.
In the two years after he was forced out of Vivendi, Messier had to go to court in Paris and New York to hang on to his estimated euro 20.5 million payoff and has been fined more than a couple million dollars by US and French courts for publishing “inaccurate” and “abusively optimistic” information concerning Universal’s financial state.

The French trial is scheduled to run until June 25.