PARIS (AP) — Shareholders from the U.S. and multiple countries took entertainment conglomerate Vivendi Universal to court in Paris on Tuesday to demand up to $1 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 Tuesday in the Paris commercial court.
Vivendi’s high-flying CEO 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 U.S. 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 $1 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 U.S. legal proceedings involving the same period.
At Tuesday’s trial, the shareholders’ lawyers argued that the company management, gripped by an “obsession of grandeur” and determined to prop up the share price, intentionally released incomplete or fraudulent information about Vivendi’s financial troubles.
Vivendi’s lawyers largely focused on technical issues.
It took several years for the current trial to reach court because of procedural and pandemic-related delays. Another related court case involving Vivendi shareholders is also pending in France.
A verdict is expected at a later date.