Bonum Certa Men Certa

Understanding Thierry Breton: “Rhodiagate” and the Vivendi Universal Affair

Overview





Understanding Thierry Breton



Further parts pending review and research




Rhodia logo

Summary: When the "Rhodia affair" became the "Breton affair"

Rhodia was a French speciality-chemicals firm which floated on the stock exchanges in Paris and New York in June 1998 after being spun off from its parent Rhône-Poulenc.



"Stern was found in his apartment in Geneva in February 2005 dressed in a full-body latex suit with his hands tied behind his back and multiple gunshot wounds."Five years after its debut the company ran into serious trouble. It reported a € 1.3 billion loss following write-downs worth €850m. At one stage its shares had lost 95% of their value since the IPO, reaching a low of € 0.95 in 2004.

The economic downturn was partly to blame but a string of risky and ill-judged acquisitions shortly after its IPO also dogged the company.

At its lowest ebb, Rhodia was confronted with a new phenomenon spreading across Europe - shareholder activism - which in the case of Rhodia was mainly aimed at its acquisitions, for example, the US company ChiRex, bought in 2000 for $ 510m in cash in a deal later described as "the most egregious of the many overpriced takeovers of the time".

"Meanwhile, at Rhodia the French financial watchdog, Autorité des Marchés Financiers (AMF), opened an official investigation into "misrepresentation of accounts, dissemination of false and misleading stock market information, insider trading and concealment of insider trading" on the company's accounts between 1999 and 2003."In 2004, the "Rhodiagate" affair erupted in France when the company became the subject of a French judicial enquiry after two minority shareholders filed a complaint accusing it of false accounting and other malfeasance.

The aggrieved shareholders were Hughes de Lasteyrie du Saillant, a scion of one of France's oldest noble families resident in Belgium, and Edouard Stern, a French investment banker resident in Switzerland.

Hughes de Lasteyrie and Edouard Stern
Aggrieved shareholders Hughes de Lasteyrie and Edouard Stern whose complaints led to the "Rhodiagate" scandal.



Stern was found in his apartment in Geneva in February 2005 dressed in a full-body latex suit with his hands tied behind his back and multiple gunshot wounds. In the days following the initial reports of murder, the French and Swiss press ran riot with rumors and speculation about possible links between Stern's death and Rhodia, the Russian mafia, or both. It was reported that a French prosecutor had suggested to Stern that he purchase a gun in the course of the Rhodia affair.

"What caused the most shock waves in France was that the meltdown of Rhodia happened under the noses of some of the country's most respected business and government leaders."But the Geneva investigators quickly identified a prime suspect, one of Stern's paramours, Cecile Broussard, who confessed to the murder which she claimed to have committed in "a moment of passion".

Meanwhile, at Rhodia the French financial watchdog, Autorité des Marchés Financiers (AMF), opened an official investigation into "misrepresentation of accounts, dissemination of false and misleading stock market information, insider trading and concealment of insider trading" on the company's accounts between 1999 and 2003.

"Although the two investigations concerned separate matters they were interconnected because the plaintiffs and those potentially implicated were the same in both cases."The AMF settled the case in June 2007, fining Rhodia €€ 750,000 and ex-CEO Jean-Pierre Tirouflet € 500,000 for misleading investors about the group’s debt between 2001 and 2003 as well as financial details surrounding its acquisitions.

What caused the most shock waves in France was that the meltdown of Rhodia happened under the noses of some of the country's most respected business and government leaders. The company's board from 1998 to 2002 included Jean-René Fourtou, the former Rhône-Poulenc chief executive who was later brought in to restore financial health to media conglomerate Vivendi Universal after the disastrous reign of Jean-Marie Messier.

The affair was particularly embarrassing for Thierry Breton because he had only been in office as Minister for Economy for around four months when the investigating magistrates ordered a series of searches in connection with investigations relating to "Rhodiagate" and the sale of Canal+ Technologies to Thomson Multimedia by Vivendi Universal in 2002.

Although the two investigations concerned separate matters they were interconnected because the plaintiffs and those potentially implicated were the same in both cases.

"At Rhodia, Breton was a non-executive director and member of the audit committee during the period from 1998 to 2002 when the accounts were alleged to have been falsified."Breton was implicated in both cases because they involved companies where he had been active at the time of the alleged irregularities. At Rhodia, Breton was a non-executive director and member of the audit committee during the period from 1998 to 2002 when the accounts were alleged to have been falsified. He was also chairman and CEO at Thomson Multimedia from 1997 to 2002 when the Canal+ deal was being brokered with Vivendi Universal.

Towards the end of June 2005, a total of 15 raids ordered by the magistrates were carried out by investigators and financial police within the space of 48 hours. The searches covered Breton's ministerial office, his home, the offices of Rhodia, Vivendi Universal, the home of Vivendi’s supervisory board chairman, the offices of Canal+ television and of the Thomson group. The searches took place while Breton was out of the country on official business en route to a UN conference in New York.

This was the first in the history of the Fifth Republic, that the office of a serving minister had been raided. Breton admitted that he had been "flabbergasted" when he had heard about the raids but he rejected suggestions that his position had been in any way compromised by the operation.

Thierry Breton raid
After a raid on his office by investigators, the Minister for Finance (Thierry Breton) contemplates where he should start cutting public service posts.



Referring to Rhodia, he claimed that he had done nothing wrong. He insisted that none of the information presented by the management or by auditors had "offended my sense of ethics, my rigour and my principles". He told the French media that he was "just one small administrator among others" and that attempts to implicate him in corporate malfeasance were "a nauseating manipulation".

"Although Breton tried hard to play down the effect of the raids on his ministerial authority, members of the Socialist opposition insisted that he had been weakened. They called on him to explain himself and argued that, as Finance Minister, he was in a conflict of interest."Asked about the raid on the offices of Canal+, he said that was "an entirely different matter" and claimed that he had no longer been at the head of Thomson when the deal was concluded.

Although Breton tried hard to play down the effect of the raids on his ministerial authority, members of the Socialist opposition insisted that he had been weakened. They called on him to explain himself and argued that, as Finance Minister, he was in a conflict of interest.

Chirac was particularly vulnerable after French voters' rejection of the EU's proposed constitution and, according to the WSJ, the criminal investigation spawned by de Lasteyrie had the "already scandal-scarred government on edge".

On 30 June 2005, the Wall Street Journal reported that Breton was "on the ropes" recalling that his predecessor Hervé Gaymard had "only lasted four months before he was forced to leave over a property scandal".

"It was starting to look as if the end was nigh for Breton's political career."In July 2005, Les Echos was informing its readers that the "Rhodia affair" had now become the "Breton affair".

It was starting to look as if the end was nigh for Breton's political career.

However, as things turned out, reports of his impending political demise were greatly exaggerated and somewhat premature.

At the beginning of 2016, the satirical French weekly Le Canard Enchaîné published allegations that officials at the regulatory authority AMF had toned down criticism of the way officials at Rhodia had managed the accounts in order to protect the Minister for Economy. AMF for its part strenuously denied that it had had "cut passages" that could have been embarrassing for Breton.

Whatever the truth of the matter may be, Breton succeeded in weathering the "Rhodiagate" and Vivendi Universal storms and he remained in office until the end of Chirac's Presidency.

However, the remainder of his term was overshadowed by turbulences at EADS, including the insider trading scandal and the "golden parachute" affair, which we will look at next.

Recent Techrights' Posts

Canonical Works for Microsoft
Where are the antitrust regulators or CMA?
[Meme] 10 Years Down the New Career System (NCS) and What it Did to Our Collegiality
New from SUEPO, the staff union of the EPO
[Chart] Chromebooks in Micronesia Grew at the Expense of Microsoft Windows
As of today...
Angola: Microsoft Windows Down From 98% to 12%
Africa is "lost territory" for Microsoft colonialism
No News Drought in Techrights
Leaving my job after almost 12 years also contributes to available time for research and publication
A 3-Year Campaign to Coerce/Intimidate Us Into Censorship: Targeting My Wife
In my view, it is a form of overt sexism
The Campaign to 'End' Richard Stallman - Part II - Scaring People Who Produce Videos in Support of Stallman
There are allegations of threats, defamation, and censorship
 
Links 30/05/2024: Public Domain and Kangaroo Courts
Links for the day
Links 30/05/2024: Microsoft Layoffs Back in Headlines, RISC-V and Standards
Links for the day
Gemini Links 30/05/2024: A Lonely Friend and Deletion of Old Posts
Links for the day
A 3-Year Campaign to Coerce/Intimidate Us Into Censorship: In Summary
Some high-profile examples of defamation include Linus Torvalds, Richard Stallman...
Death Valley
The truth can be twisted
[Meme] UEFI 'Secure' Boot's Model of Security
Lion cage with people
Climbing a Tall Mountain for 2 Decades
In Web terms, 20 years is a very long time. Very few sites (or a small proportion of the whole) make it to 20.
If You're Going to Concern-Troll "Linux" Make Sure You Actually Use It (Or Tried It)
Concern-trolling has long been a key ingredient of GNU/Linux Fear, Uncertainty, and Doubt
The Serial Strangler From Microsoft is About to Be Served Court Papers
You can run, but you cannot hide
The Campaign to 'End' Richard Stallman - Part III - The Reddit Mob (Social Control Media Controlled, Steered or Commandeered by Wall Street)
This is totally reminiscent of what authoritarian regimes do
Caged by Microsoft
Are you telling me that preventing people from booting their Linux is security?
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Wednesday, May 29, 2024
IRC logs for Wednesday, May 29, 2024
Linus Torvalds Mocked "Cloud Native" in His Latest Talk (Arguing It's Just Hype), 'Linux' Foundation 'Research' (Marketing) Chooses Proprietary Software to Query Its Adopters
The name "Linux" is overused, abused, even grossly misused
Links 29/05/2024: More Arrests of Regime Critics and Hate Crimes
Links for the day
Brittany Day (linuxsecurity.com) Now Leverages Microsoft Chatbots to Promote Microsoft Propaganda Disguised as "Linux"
What Brittany Day does is an attack both on the Web and on Linux
[Meme] Don't Trust Users to Boot Their Own PCs?
UEFI 'secure' boot
Links 29/05/2024: Hack The Box, Why I Left Healthcare, and Chatbots as Health Risk
Links for the day
Gemini Links 29/05/2024: BESM Retro Second Edition and Itanium Day
Links for the day
Azerbaijan: Microsoft Falls From 99.5% to Almost Nothing or Less Than 20% (Windows Down Sharply, GNU/Linux Surges)
Based on statSounter
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Tuesday, May 28, 2024
IRC logs for Tuesday, May 28, 2024
The Campaign to 'End' Richard Stallman - Part I - Two Canceled Talks in a Row?
RMS has left Europe, so the concept of "delayed" talk is facetious or deeply cynical
An "Efficient Windows 11 Experience" is Removing a Text Editor (Less than 5 Megabytes in Size) and Adding Chatbots That Require a New PC/Datacentre
Vista 11 24H2 update removes WordPad
On Desktops/Laptops in Andorra Windows Fell to Less Than Half, 20% If One Counts Mobile as Well
And this is a European country
[Meme] 3 Years Later
If you're going to start a fight, make sure you can handle it
When You Leave a Bad Employer and Move on to Better Things
Perhaps my main mistake was not resigning from my job sooner
No, Your Site Likely Does Not Need WordPress
I was one of the first users of WordPress
GNU/Linux in Cameroon: Rising Steadily While Windows Falls From 99% to Just 6%
If one also counts mobile (mostly Android)
Monkey See, Monkey Share
on deprivation of users
From 0.17% to 10% or More (GNU/Linux in Dominica)
Dominica isn't well known, but it does seem to have embraced Chromebooks in recent years
Links 28/05/2024: Tensions in East Asia, UK Mandatory National Service
Links for the day
Gemini Links 28/05/2024: NetCrawl and Living in Lagrange
Links for the day
Guardian Digital, Inc (linuxsecurity.com) Handed Over Its Web Site to Chatbots That Generate SEO Garbage
They need to be called out on it
statCounter Sees Microsoft Windows at Below 1% in American Samoa
Not even 1%!
Windows Down to 60% of Guam's Desktops/Laptops and Down to a Quarter Overall
No wonder Microsoft is panicking
Today in UEFI 'Secure' Boot Debates (the Frog is Already Boiling and Melting)
Over at LQ today
[Meme] A "Modern" Web's Message in a Bottle
So-called 'security'
Brittany Day: Still Chatbot Slinging, Producing Fake 'Articles' About "Linux"
random garbage produced (and censored) by Microsoft
Almost 4k Gemini Capsules, 5th Anniversary Only Weeks Away
The Web will continue to deteriorate
Microsoft: $1 Million a Day for Contempt of Court Orders (Justice Department)
Microsoft behaves as if it's 100% exempt from laws
Catbodia? In Cambodia, Microsoft's Windows Fell to All-Time Low of Less Than a Quarter.
Cambodia is leaving Microsoft behind
[Meme] Deadnaming
Guess who uses a name that was deprecated well over a decade ago?
[Meme] 'Secure' Boot in a Nutshell
Ask Microsoft if it is "safe" to boot Linux
New Press Report Explains Microsoft Severance and Quiet (Undisclosed) Layoffs
Some people will call this "loophole", whereas others will opine that it is outright illegal (but kept secret to circumvent scrutiny)
Global South is Android/Linux (Windows Era Has Come to an End Already)
I've decided to take a quick glance at South American trends for all operating systems
[Meme] Unified Patent Troll
Unified Patent Court remains illegal and unconstitutional
The European Patent Office is Sinking
Officials (or national delegates) at the European Patent Organisation have long been warned about this (by staff representatives from the European Patent Office), but they ignored the warnings
A 3-Year Campaign to Coerce/Intimidate Us Into Censorship: Targeting Guest Writers (Intimidation)
Some high-profile people have told me that the serial defamer is a "monster" (their word), so why would Neil Brown wish to help him?
Summer in the Air
We have a good pace going on owing to health, positivity, inertia and good software tools
GNU/Linux Activity in Belize
From an economic point of view, Microsoft needn't worry about Belize, but when it comes to preserving the Windows monopoly/monoculture Belize matters
Links 28/05/2024: Back to MP3, NVIDIA Sued by Authors
Links for the day
Gemini Links 28/05/2024: Bad Beach and TLS
Links for the day
Microsoft Windows Fell From 100% to Just 7.5% in Sierra Leone
Based on statCounter
In Benin, Microsoft's Windows Fell Below 10%, GNU/Linux Surged to 6% or Higher on Desktops/Laptops
That's nearly 7% - a lot higher than the average in Africa
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Monday, May 27, 2024
IRC logs for Monday, May 27, 2024