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ROME – Vivendi chairman Vincent Bolloré and managing director Arnaud De Puyfontaine are under investigation by Milan prosecutors for alleged stock market manipulation in connection with the French media conglomerate’s recent rapid stake-building in Italian TV group Mediaset.

Under Italian law, being under investigation is not tantamount to being indicted. As a Vivendi statement put it, “this does not in any way signify any accusation against any person.”

But the statement slammed the investigation as “the result of an unfounded and abusive lawsuit filed by the Berlusconis against Vivendi after the increase of its stake in Mediaset.” Mediaset is owned by former Italian Prime Minister Silvio Berlusconi (pictured, right).

In December, Milan prosecutors opened a preliminary probe into Vivendi’s aggressive purchase of shares in Mediaset, following a formal complaint by Fininvest, the holding company of the Berlusconi-owned TV group. In a short period, Vivendi’s stake in Mediaset rapidly rose from 3% to 30% of shareholding and voting rights, the maximum an investor can own before it becomes legally obliged to launch a takeover bid.

Vivendi’s rapid-fire purchase of Mediaset stock was part of escalating hostilities between the two media companies, whose much-vaunted partnership deal, signed last April, fell apart just three months later when Vivendi decided to pull out. Mediaset alleged breach of contract, and has sued Vivendi for 1.5 billion euros ($1.59 billion) in damages, claiming that Vivendi’s withdrawal from the deal caused its stock price to plummet.

Under the terms of the partnership agreement, the two groups would have reciprocally swapped a 3.5% stake and Vivendi would have acquired Mediaset’s pay-TV business, Mediaset Premium.

Elsa Keslassy contributed to this report.