Warner Music exec found guilty of misleading Vivendi investors
MADRID — A French court handed Warner Music Group chairman and CEO Edgar Bronfman Jr. a Euros5 million ($6.7 million) fine Friday for misleading investors while serving as a senior executive at French conglom Vivendi.
Bronfman, who was Vivendi vice-chairman from 2000 to 2003, has also received a 15-month suspended prison sentence.
The charges relate to the period 2000 to 2002 when Vivendi management fought to shore up the conglom’s stock price after the Internet bubble burst. Bronfman was also found guilty of “manipulating stock prices” in 2001.
The court also convicted former Vivendi CEO Jean-Marie Messier, an icon in France of rampant 1990s capitalism, of misappropriation of company funds and misleading reporting while at the head of Vivendi, Europe’s biggest media group.
Messier received a $200,000 fine and a three-year suspended sentence. His lawyer, Pascal Wilhelm, said that Messier will appeal.
Messier plunged Vivendi on a buying spree in the late 90s, energized by the conglom’s seemingly ever-soaring stock price.
Vivendi paid $42 billion in 1999 to buy Seagram, which included Universal Studios, MCA Records and USA Networks, so bringing Bronfman into the company. Messier was ousted in August 2002.
The trial caps seven years of investigations dating back to a probe in 2002.
The convictions come despite a high-profile trial last June where the public prosecutor, arguing that criminal intent must be proved, recommended the executives’ acquittal.
Messier’s conviction on misappropriation of company funds relates to a $26.8 million severance package that Messier later renounced.
His sentence could have been more severe: Messier faced a maximum five-year jail sentence, and was cleared Friday on another count of manipulating Vivendi’s stock price.
Further litigation is still outstanding.
Vivendi, Messier and former Vivendi finance director Guillaume Hannezo stood trial January last year in a Manhattan district court in a massive class-action lawsuit involving a million U.S., French, British and Dutch Vivendi investors. They were again accused of misleading investors as to Vivendi’s true financial health from 2000 to 2002.
A U.S. jury found Vivendi liable of misleading investors from 2000 to 2002 with statements that hid a liquidity crisis. Damages still have to be determined, however.