Bollore Stays in Custody as French Bribery Cops Face `Taboo'
(Bloomberg) -- French regulators, notoriously slow in their pursuit of economic crimes, are announcing their arrival as global cops.
The country’s anti-bribery enforcers have rarely levied large fines against corruption cases, but are now going after the scalps of one of the country’s richest men as well as one of Europe’s flagship industrial companies. Billionaire Vincent Bollore was detained for police interrogation Tuesday on corruption suspicions -- and could remain in custody until Thursday -- while Airbus SE reportedly risks a fine in excess of $1 billion.
For years, French regulators were missing from the international corruption enforcement scene, an absence that earned the country a rebuke from the Organisation for Economic Cooperation and Development at the beginning of the decade. U.S. authorities, on the other hand, haven’t been shy in fining foreign companies -- especially French ones.
“The topic of corruption was totally taboo in France about 10 years ago,” said Charles Duchaine, the head of the country’s new anti-corruption agency. “Not only did no one talk about it but also no one did anything about it -- or so very little.”
Corruption is something the general public doesn’t see and that can furthermore take place in a faraway country, Duchaine, 55, said in an interview at his office in the south of Paris.
“Today, mentalities are changing: Let’s hope it’s not just a change in looks without substance,” said Duchaine, who opposed organized crime and domestic corruption in his previous role as an elite French investigator known as a “juge d’instruction.”
The detention of Bollore in a nondescript police building in the northwest outskirts of the capital is another sign that French authorities are stepping up their prosecution of international corruption cases -- and aren’t afraid to go after top executives. Bollore runs a company with a market value of $14.7 billion that has a near-monopoly on ports in West and Central Africa. He is also the biggest shareholder in Vivendi SA.
Bollore received a summons from the authorities several weeks ago, and turned up of his own accord at the Nanterre police station Tuesday morning, a person familiar with the matter said. He was then placed in custody for interrogation. Investigating judges suspect that managers of Bollore SA used advertising company Havas to facilitate the election of leaders in Guinea and Togo nearly a decade ago by providing communications advice at a discount price, the person said.
Other managers -- Bollore Groupe executive Gilles Alix, and a partner at Havas in Paris -- were also held for questioning Tuesday, according to a second person with knowledge of the probe. Spokeswomen at Havas -- a unit of Vivendi -- didn’t immediate return emails seeking comment on the partner’s detention.
Despite the 66-year-old Bollore’s great renown, his detention wasn’t the main front-page story in three of France’s biggest morning newspapers.
The Bollore Groupe said in a statement that it “formally denies” that the unit under investigation did anything irregular.
The billionaire could remain in custody until as late as 10 a.m. Thursday, according to a person familiar with the matter who asked not to be identified discussing a confidential investigation. The probe could result in charges against the billionaire.
The shares of his company declined as much as 3.7 percent Wednesday after falling 6.1 percent the previous day.
Bollore SA said Tuesday that its executives “are happy to cooperate fully” with authorities.
Known as a corporate raider and a close friend of former French President Nicolas Sarkozy, he is one of the country’s richest men, with a net worth of $6.6 billion. Bollore took over his family’s ailing paper company in 1981 and built an $14.8 billion conglomerate, with holdings including African railroads and Asian rubber plantations.
Last week, Bollore handed over the reins at Vivendi, the French media company where he’d been chairman since 2014, to his son, Yannick Bollore.
Bollore has access to ports in West and Central Africa, holding concessions to operate container terminals in 15 nations including Guinea, Togo and Nigeria. The company also runs 25 dry ports including in landlocked nations such as Burkina Faso and Chad. The group’s market share in Africa is about 13 percent, according to the company’s website. It has operations in almost every country on the continent.
French officials enacted a much tougher anti-corruption law last year that allows for settlements that use a procedure similar to Deferred Prosecution Agreements and obliges companies with more than 500 employees and 100 million euros ($122 million) in revenue to set up monitored anti-corruption policies.
France’s previous approach can be seen in a case against Total SA.
Nearly 15 years after the case was first opened, French judges fined the oil company 750,000 euros in a corruption case linked to Iraq’s oil-for-food program. That’s about 500 times less than what it paid in the U.S.
Other French companies have been targeted in American corruption cases. In 2010, Technip SA settled for $338 million and that same year, Alcatel-Lucent SAS paid $137 million. In 2015, Alstom SA was forced to pay a $772 million fine in a bribery case.
American regulators fined BNP Paribas SA -- France’s largest bank -- $9 billion four years ago to settle a sanctions violations case. While the case didn’t involve corruption, the amount of its fine got the attention of companies and authorities in France, Stephane Bonifassi, a criminal lawyer in Paris who wasn’t involved in the case, said in a phone interview.
“France decided it’s time to get its act together, otherwise it would just get fleeced by U.S. authorities,” Bonifassi said.
Lucie Mongin-Archambeaud, a Paris-based business ethnics lawyer with Osborne Clarke, said France wanted to show that it too can fight corruption, and doesn’t need the U.S. to lead the way.
“It became a sovereignty issue,” she said by phone.
As a result, enforcers in France have become bolder and better equipped in recent years.
A prosecutor specializing in major financial crime was set up in 2014 and has begun making a name for itself outside of France. The Parquet National Financier, or PNF, is working with the U.K.’s Serious Fraud Office in the investigation of possible bribery by Airbus. The PNF is also going after Societe Generale SA over corruption allegations related to the bank’s work with the Libyan Investment Authority.
“The current trend for anti-corruption in France is unique,” said Nicolas Tollet, a Paris-based lawyer with Hughes Hubbard & Reed. “France was very inactive until very recently. That was partly due to a lack of willingness from the French state to prosecute companies for corruption."
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