Stéphane Richard, chief executive of France Telecom, has been placed under formal investigation by a French court on suspicion of involvement in organised fraud in a highly political case that dates back to his time as a senior official in the finance ministry during the presidency of Nicolas Sarkozy, reports The Financial Times.
France Telecom said the dramatic move, which followed more than two days of questioning in custody during which Mr Richard was admitted to hospital, would not affect his running of the company.
“Stéphane Richard will return to work tomorrow [Thursday] morning,” a spokesman said.
But the government pointedly declined to give its full backing to Mr Richard, who denies any wrongdoing.
Pierre Moscovici, the finance minister, said in a statement: “Consideration of the possible repercussions of this decision on the situation of Mr Richard at the heart of [the company] is now the responsibility of the board, which must be convened as soon as possible.”
He said the state’s three representatives on the 15-person board would act “solely in the interests of the company”.
Arnaud Montebourg, the leftwing industry minister, was quoted last week as saying it would be difficult for Mr Richard to stay in charge if he was placed under formal investigation in the case. But he later denied making the remarks and Mr Richard said publicly he had been assured of the support of President François Hollande.
The court action came at the end of a gruelling three days during which Mr Richard was first interrogated by investigators from the financial police brigade and then by three judges. During the police questioning he was moved to a hospital apparently suffering from fatigue.
The judges placed him under formal investigation for “fraud in an organised band”. Under French law, this means the judges believe there is strong evidence pointing towards the cited crime. Prosecution usually, but not always, follows.
Jean-Etienne Giamarchi, Mr Richard’s lawyer, said he would be seeking to have the investigation order annulled, adding that it had “no serious basis”.
The case stems from a €400m pay-off made in 2008 to Bernard Tapie, a prominent supporter of former President Sarkozy, in an arbitration settlement of a long-running dispute between the colourful businessman and the state entity that held the assets of failed bank Credit Lyonnais.
The then-Socialist opposition instigated the court action, suspecting the settlement process had been rigged to reward Mr Tapie for his backing for Mr Sarkozy, at taxpayers’ expense.
At the time, Mr Richard was chief of staff to Christine Lagarde, the finance minister. In a parallel action by a separate court last month, Ms Lagarde, who also denies any wrongdoing, was made an “assisted witness” in the case after two days of questioning.
Read more of this story from The Financial Times.
See also:
Tapie-Lagarde affair enters new phase as arbitration judge is investigated for conspiracy to defraud
How IMF chief Lagarde narrowly escaped being placed under formal investigation in Tapie probe