Vivendi Universal SA’s Paris headquarters were raided Thursday by police investigating the accounts it published under former Chief Executive Jean-Marie Messier, whose expansion strategy left the company close to default in July.
The world’s No. 2 media company is “fully cooperating with the investigators,” said spokesman Antoine Lefort. A team from the Finance Brigade of the Paris public prosecutor’s office is carrying out the search, the company said in a statement.
Vivendi faces a criminal investigation in France and the U.S. and shareholder lawsuits over how it operated and presented its finances under Messier, who was fired in July. Messier oversaw a 91 percent drop in Vivendi’s shares from a record 150 euros in March 2000 to 13.9 euros when he was ousted.
French investigators are examining whether the company published “false accounts to hide the true nature of its financial situation” in 2000 and 2001, the prosecutor’s office has said.
Shares of Vivendi fell as much as 43 cents, or 2.7 percent, to 15.75 euros. They were trading at 15.8 euros on the Paris stock exchange as of 1:38 p.m. Paris time.
The police are also searching Messier’s house, which is in Rambouillet, a town outside of Paris, French daily Les Echos reported on its Web site. Messier cancelled plans to meet with the Anglo-American Press Association in Paris this evening.
Under Messier, Vivendi spent $77 billion on acquisitions to transform a water utility into a rival of AOL Time Warner Inc., the world’s biggest media company. The former Lazard LLC banker, who turns 46 on Friday, was fired after his strategy led to a record loss and piled up debt.
Jean-Rene Fourtou, who replaced Messier, brought Vivendi back from the verge of bankruptcy by selling more than $5 billion worth of assets, including Boston-based publisher Houghton Mifflin Co. He has also agreed to sell Vivendi’s 149-year-old water business to a group of investors.
A shareholder lawsuit in France filed against Vivendi focuses on the time Messier was in charge.
The French stock market regulator is also looking into Vivendi’s past financial statements.
The U.S. Securities and Exchange Commission upgraded its probe to a formal investigation last month, giving the agency power to issue subpoenas for documents and testimony. The probe is being conducted in conjunction with the U.S. Attorney for the Southern District of New York.
Need Legal Help?
New York City, Long Island, New Jersey, and Florida
Our New York personal injury lawyers are here to help you when you need it the most.