Vivendi CEO was reckless, lied to board and shareholders
Who are these people? And why do their boards leave them in charge for this long? Another horrifying corporate scandal story about Vivendi and its reckless former CEO Jean-Marie Messier in this Wall Street Journal story (subscription required):
Mr. Messier, a former top investment banker with Lazard LLC, was famously fond of deal making. But now it turns out he pursued many more deals than has been publicly known. More important, he spent billions of dollars buying back Vivendi stock on the market last year without consulting his CFO or the board, according to people familiar with the situation. Trying to prop up the stock price, he instead only sent Vivendi's debt soaring.
...Mr. Messier arrived at the water utility Cie. Generale des Eaux in 1994 and after becoming CEO two years later, changed its name to Vivendi SA. In late 2000, he engineered its merger with Seagram and French pay-TV firm Canal Plus SA. In just 18 months, beginning in December of that year, Mr. Messier took Vivendi Universal from a company that had only $3 billion in debt to one with debt of $21 billion.
...Now living on New York's Park Avenue with his family and planning to start his own private-equity firm, Mr. Messier is a defendant in at least 16 shareholder lawsuits in the U.S. and one in France. The suits allege, among other things, that the 45-year-old businessman concealed the company's cash problems while talking up its prospects. Last month, Vivendi's board denied him a severance package he was seeking of more than $18 million.
...At a French parliamentary hearing last month, Jean-Rene Fourtou, Vivendi's new chairman, was asked about Vivendi's finances when he took the company's reins July 3. "Well, if Mr. Messier had stayed, the company would have gone bankrupt within 10 days," he said.