Just who is Monsieur Borloo?

By
This article is freely available. Check out our subscription offers. Subscribe

'Corrupt system'

A third stage of the system was later added to ensure that everything went without a hitch. It was important to ensure the goodwill of the judicial administrators, appointed by the commercial court to watch over the takeover plans. The officials became directly implicated in the 'system'; if they entrusted the capital funds of the companies they were responsible for with the SBDO, the Vernes bank or the Rivaud bank, the returns were well below par. But in return for doing so, the administrators were granted personal loans well below usual rates (4% - 5% as opposed to 15% -18%). Occasionally, the banks did not even insist on the loan repayments.

These practices went on until the collapse of Crédit Lyonnais in 1993 and were only finally judged in court in March 2008. “"An examination of the facts reveals that [Pierre Despessailles] has put in place a truly corrupt system with which a good number of administrators acquiesced, with a greater or lesser degree of voracity”," the court's judgement read. It handed out suspended prison sentences to several of them. Pierre Despessailles escaped justice, having died in July 2007. The parliamentary committee of inquiry into the Crédit Lyonnais in 1994 never questioned Pierre Despessailles, though he was implicated on numerous occasions. Neither did the committee quiz Jean-Louis Borloo, who was never formerly implicated in the scandal.

Meanwhile, the law firm 'Saigne, Borloo et associés', based at 4, rue Brunel in the17th arrondissement of Paris, was visibly prospering. It was involved with Bernard Tapie's takeovers, including Terraillon, Testut, Look and Wonder. Often these takeovers were carried out with the very strong support of local politicians unable to avoid the bankruptcy of a business in their area. As for the employees of the different businesses, they would soon discover the bitter reality of the takeover plans put forward by Tapie and drawn up by Jean-Louis Borloo.

Less high-profile takeover specialists followed the same route. One was Michel Coencas, a close friend of Borloo, who expressed his admiration for a businessman able to decide on a deal on the basis of a simple phone call. And the lawyer put a lot of business his way.

Michel Coencas came from a family of scrap metal dealers, and quickly built up a business empire by buying up companies in difficulty. His main focus was in areas that did not attract much attention – scrap metal, foundries and sub-contractors in the car industry. Soon he became head of Valfond, a group worth several billion francs. Like Tapie, Coencas had problems with the tax authorities who asked questions about the to-ing and fro-ing of assets of businesses taken over. When he was given a tax bill of 11 million francs (about 1.7 million euros), he found help with Nicolas Sarkozy, then budget minister, thanks to an introduction from Christian Estrosi (then an MP, now industry minister). The tax bill was miraculously erased. Coencas, like Tapie, would later become involved in football and showbiz. Sentenced to two years in prison in 2006 for fraud, he was released in October 2007.

Meanwhile many of the 'great entrepreneurs' of the 1980s were making their way to Borloo's law firm on the rue Brunel. Among them was François Pinault, now one of France's wealthiest businessmen, then a timber merchant. Pinault quickly understood the advantages of Borloo's methods, particularly if the business concerned was in a region represented by a leading political figure. Another man to visit the law firm was Vincent Bolloré, a former pupil of the lycée Janson de Sailly secondary school in Paris at the same time as Borloo. Henri Morel, head of the company Société française de participations industrielles (SFPI), made a fortune with the help of the law firm. In fact many leading businessmen saw the merit in having Jean-Louis Borloo as their lawyer, a notable exception being Bernard Arnault, head of the LVMH group. Borloo had the keys to smoothing the way at the commercial courts and gave access to the Crédit Lyonnais and its affiliates.

___________________________________

AT A GLANCE

Jean-Louis Borloo's political career: Mayor of Valenciennes 1989-2002.
Co-founder Génération Écologie 1990.
MP for constituency in the Nord département 1993-2002 (re-eleted in 2002 but resigned to take up ministerial position).
President of the Valenciennes metropolitan authority 2000-2008.
Minister for the City and Urban Renewal 2002-2004.
Minister for Labour, Employment and Social Cohesion 2004-2005.
President Radical Party 2005-current day.
Minister for Employment, Social Cohesion and Housing 2005-2007.
Minister of Economy, Finance and Industry May-June 2007.
Minister for the Environment, Energy and Sustainable Development 2007 - November 2010.
Extend your reading on Mediapart Unlimited access to the Journal free contribution in the Club Subscribe
Some information in this article first appeared in a book by the author, Martine Orange, titled L'Histoire secrète du patronat (The secret history of business leaders), published by La Découverte in 2009.