PARIS (AP) — Shareholders from the United States (US) and multiple countries took entertainment conglomerate Vivendi Universal to court in Paris on Tuesday to demand up to USD1 billion in damages for allegedly hiding its massive debts and other financial troubles from investors 20 years ago.
Vivendi — whose holdings currently include Universal Music Group, Gameloft video game producer and cable network Canal+ — was accused of providing fraudulent information to shareholders between 2000 and 2002 in the trial held on Tuesday in the Paris commercial court.
Vivendi’s high-flying Chief Executive Officer at the time, Jean-Marie Messier, vaunted the company’s financial health even as it was bleeding cash, according to internal company documents read at the trial. Its share price plunged in July 2002 after its difficulties became public, and the company lost billions.
Scores of institutional shareholders who lost out as a result – including public pension funds from the US and Europe – are seeking compensation from the company via Tuesday’s trial.
Vivendi lawyers argued that the company’s troubles were not hidden and were the result of an “error of strategy” and not securities fraud.
France’s financial market regulator ordered Vivendi and Messier to pay USD1 million each for fraud in 2004 over their actions in the early 2000s. Vivendi was also found liable for violating federal securities laws in separate US legal proceedings involving the same period.