French scandal of the week at The Bad Hair Blog: Pinault’s fraud surrounding the takeover of Executive Life
If you would like to think that all those French corruption scandals I post about won’t be coming “to a neighborhood near you”, think again, especially if you’re in California:
French tycoon Francois Pinault, one of the world’s richest men, will be defending himself at the trial: French tycoon defends self in multi-billion-dollar US trial
Pinault and his firm are accused of acquiring and profiting from Executive Life’s lucrative — and allegedly ill-gotten — junk-bond portfolio in 1995 after the then state-owned French bank Credit Lyonnais acquired the firm illegally and then sold off its assets.
The suit claims that Credit Lyonnais used French insurer MAAF as a front to buy Executive Life, violating a California law barring foreign governments from controlling insurance companies.
In addition, a US federal law banned banks from owning more than 25 percent of a non-banking business.
Artemis later conspired with the French investors to buy some of the assets of Executive Life, making a 2.5 billion-dollar profit on the operation when the value of the bonds rose, the suit claims.
California Insurance Commissioner John Garamendi is seeking a total 3.7 billion dollars in restitution, which includes more than a decade of interest.
Pinault is one of Chirac’s close friends. Yet another one of Jacques’s friends was telling the press last week that his involvement in a corruption trial won’t have a negative impact on Paris’ 2012 bid for the Olympics. Since the only thing preventing Jacques from prosecution is that he’s in office, I expect Jacques will still be in the running by 2012. That is, if he still has friends.