Former Vivendi Universal S.A. chairman Jean-Marie Messier was arrested by French authorities Monday, as part of an ongoing criminal investigation of the former French media giant.
Messier was ousted as head of Vivendi Universal in July 2002, a little more than a year after embarking on an ambitious acquisition spree that made it one of the largest media companies in the U.S.
Vivendi named Jean-René Fourtou as chairman in July 2002, who then moved to sell off most of its entertainment assets to pay down debt.
Earlier this year, Vivendi closed the sale of 80% of its Vivendi Universal Entertainment unit (which included USA Network, Sci-Fi Channel, Universal Studios and Trio) to General Electric Co.’s NBC television division for about $14 billion.
Messier was vilified as the arrogant architect of Vivendi’s failed entertainment strategy, and last year agreed to pay the U.S. Securities and Exchange Commission $26 million (his $25 million severance package plus a $1 million penalty) to settle fraud charges.
Vivendi agreed to pay a $50 million fine, stemming from accusations that the company, Messier and former chief financial officer Guillaume Hannezo used deceptive accounting practices that allowed the company to meet earnings estimates.
According to published reports, Messier was questioned by French authorities on Monday and was expected to be released on Wednesday.
His arrest follows that of Hannezo and two lower-level executives in Vivendi’s financial department. The three executives were had been arrested and released after they were questioned.
According to the Wall Street Journal, investigators are curious about four main issues during Messier’s tenure:
- large stock buybacks by the company after the Sept. 11, 2001, terrorist attacks in the U.S.
- possible insider trading by Vivendi executives in December 2001
- the accuracy of Vivendi’s financial statements and
- whether Vivendi should have consolidated three partly-owned telecommunications subsidiaries in its accounts.