A Paris judge has ruled that Jean-Marie Messier and Edgar Bronfman Jr. must stand trial in France for alleged insider trading, share-price manipulation and other charges during their tenure at the helm of what was then Vivendi Universal in 2002.
The ruling, made by an investigating magistrate, Jean-Marie d’Huy, overturns a January decision by the Paris prosecutor, who threw the same case out of court. The earliest the trial could take place is 2010.
Former Viv U CEO Messier, former vice chairman Bronfman (who is now chairman of Warner Music Group) and five other former Viv U execs now face charges which carry up to five years in prison plus weighty fines.
Bronfman’s attorney, Thierry Marembert, noted that the prosecutor in the case had recommended that Bronfman should no be forced to stand trial. Bronfman’s transactions were “at all times proper and at no time did he contravene any French laws or regulations,” Marembert said in a statement issued Friday.
He further noted that Bronfman has “cooperated fully with the authorities’ inquiries regarding certain personal transactions that took place nearly eight years ago.”
In France, where media reports have centered on Messier, the judge’s decision has been greeted with surprise as d’Huy had been expected not to pursue prosecution.
The probe into charges of stock manipulation date back to 2002, after a complaint by shareholders alleged that the company under Messier deliberately misled investors into buying or holding Viv U stock.
In the 1990s, Messier turned French water utility Vivendi into a high-flying media giant in a frenzied asset acquisition stoked by Vivendi’s seemingly ever-soaring stock price.
In a 1999 deal that brought Bronfman on board Vivendi, Messier bought Seagram — which included assets Universal Studios, MCA and USA Networks among other entertainment companies.
But Messier’s spending spree rolled up $47 billion in debt, nearly bankrupting the company and decimating the stock. Messier resigned in July 2002 and his successors sold off assets. In 2004, France’s Financial Market Authority fined Messier $1.5 million, halved on appeal, for misleading investors about Viv U’s indebtedness.
Vivendi in its current form came into existence on April 20, 2006 following the sale of an 80% stake in the Viv U Entertainment unit to form NBC Universal.
Vivendi now faces a contested class action lawsuit in New York for allegedly supplying misleading financial information between 2000 and 2002, when Messier was forced out of the conglom.
In a statement, Vivendi said: “Vivendi joined in these proceedings as a civil plaintiff in October 2002 and has fully cooperated with judicial authorities from the start.”