Messier And Bronfman Jr. On Trial

Jean-Marie Messier, who transformed Vivendi from a French water utility into a global media group, was in court June 2 to face charges of criminal fraud.

He’s accused of misleading the stock market, manipulating Vivendi’s share price and misappropriating company money.

The charges, which he denies, cover the period between 2000 and 2002, which includes Vivendi’s $34 billion acquisition of Seagram, the Canadian entertainment and music business.

Warner Music Group chief exec Edgar Bronfman Jr., whose family owned Seagram and who became vice-chairman of Vivendi after the deal, is also accused of criminal insider dealing and will stand trial alongside Messier.

The Paris hearing is expected to lift the lid on what is one of France’s biggest business scandals and one of the most dramatic individual downfalls in its corporate history.

Messier was initially very popular with investors, and even referred to himself as “master of the world,” as he turned France’s former water and sewage company into the world’s second-largest media group. The Seagram deal was the last one he inked.
He was ousted after his two-year empire-building exercise left the company with massive debts. Investors jumped ship and Vivendi’s share price fell 91 percent.

An interesting sub plot involves Messier and Bronfman Jr. appearing in the same court. In “Le jour où le ciel nous est tombé sur la tête” (“The day the sky fell on our heads”), a book published after he’d been thrown out of Vivendi, Messier claimed he’d been “lynched” by the Bronfman family and the French establishment.

The trial will certainly be one of the biggest business trials in French history as four more senior executives answer criminal charges relating to Vivendi. They include Guillame Hannezo, its former chief financial officer, and Philippe Guez, former head of Deutsche Bank’s French equities business.

All the defendants deny any wrongdoing, although Messier has already paid about euro 1.5 million in French and American regulatory fines relating to his time at Vivendi.

He now runs Messier Partners, a New York-based investment banking and advisory business.

In court he’ll hear evidence against him from French investigating magistrate Judge Jean-Marie d’Huy, who has accused him of giving out “false or misleading information” as he sought to shore up Vivendi’s balance sheet at the end of his huge acquisition spree.

Messier was allegedly involved in a covert plan to repurchase almost euro 2 billion worth of Vivendi stock during a closed period ahead of its results.

It was said to be an attempt to stabilise the share price after the Sept. 11 terrorist attacks of 2001.

The trial will be heard by a panel of three judges and is expected to last three weeks.