Viv U’s books draw regs’ scrutiny

Allegations focus on disposal of BSkyB

PARIS — French market regulators moved closer to proving Vivendi Universal attempted Enron-style “creative” accounting as ousted topper Jean-Marie Messier allegedly sought to hide conglom’s massive debts.

The allegations center on the way Viv U disposed of its stake in Rupert Murdoch’s U.K. satellite platform BSkyB.

Viv U had agreed to sell its 23% stake within two years to get a regulatory OK for its merger with Seagram and Canal Plus. In order not to sell in unfavorable market conditions, it parked the shares with Deutsche Bank.

Its external auditors, Salustro-Reydel, believed the v4 billion ($3.8 billion) thus raised constituted a loan. But Viv U — whose move was supported by Enron’s discredited accounting firm Arthur Andersen — put pressure on the auditors to pass it off as the proceeds of a sale.

Such creative accounting would have substantially reduced Viv U’s record $13 billion in losses, revealed this year.

For standing up to Viv U, auditor Xavier Paper was allegedly suspended from Salustro-Reydel. But France’s equivalent to the Securities & Exchange Commission, the Commission des Operations de la Bourse, stepped in and he was reinstated.

The COB launched an investigation into Viv U’s finances in July. The secretive body has refused to comment on its findings so far.

The news came to light in daily newspaper Le Monde, which claims to have copies of emails and correspondence between Viv U and Salustro-Reydel unearthed by the COB probe that “constitute an attack on the auditors’ independence.”

A source close to Viv U insisted that nothing untoward went on.

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