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Vivendi offices in Paris raided
PARIS, France (CNN) -- The headquarters of Vivendi Universal have been raided by French investigators probing the financial records of the media giant during the reign of chief executive Jean-Marie Messier. "A team of police investigators are currently carrying out inquiries at Vivendi headquarters," a Vivendi spokesman told CNN. "This follows the filing of a claim against an unnamed party in July 2002. Vivendi is cooperating fully with the enquiry." Investigators also search two of Messier's homes in the Paris area. They are looking for information on whether Vivendi issued misleading financial statements in 2000 and 2001. Messier was ousted as head of the world's second largest media group in July after the company was saddled with huge debts and pushed to the brink of bankruptcy.
Vivendi confirmed in November that it was under investigation by French regulators over its financial accounts, and that it was the subject of two new probes in the United States. The group said the U.S. Attorney's office and the U.S. Securities and Exchange Commission had launched inquiries into the company, also looking at financial activity while Messier was still in office. It is also the subject of numerous lawsuits brought by shareholders on both sides of the Atlantic. Messier was blamed for building up a 19 billion euro debt pile following a two-year buying spree in Europe and North America. The group's share price has tumbled along with revenue, prompting the board to replace Messier with Jean-Rene Fourtou. Vivendi (PEX) shares, which initially fell on reports of the raid, were up 0.3 percent to 16.23 euros in earlier afternoon trading in Paris on Thursday. In September, Fourtou announced a plan to auction assets valued at 12 billion euros by the end of 2003 in an effort to pay down its debt. Vivendi since raised 1.9 billion euros through the sales of half of its 40.8 percent stake in water and waste utility Vivendi Environnement to French state power firm EdF and a group of banks. It also raised 1.25 billion euros from the sale of non-U.S. publishing assets and about 1.75 billion euros from the sale of its U.S. publisher, Houghton Mifflin. In October, it agreed to sell its loss-making Italian pay television unit Telepiu to Rupert Murdoch's News Corporation in a long-awaited deal worth about 900 million euros. Under the terms of the agreement, News Corporation was to pay 470 million euros in cash for Telepiu and assume 423 million euros of its debt. Fourtou is also attempting to clarify the group's business strategy, which many believe became clouded by Messier's drive to build the No. 2 media group -- after AOL Time Warner, the parent of CNN -- while continuing to run diversified businesses ranging from water and waste management, telecommunications and Internet services. Earlier this month, Vivendi beat Vodafone -- the world's biggest mobile phone operator -- for control of French telecom company Cegetel. Fourtou said the purchase of the majority stake in the company did not affect Vivendi's balance sheet because the price tag was the same amount it raised through the sale of Vivendi Environnement. He also said Vivendi was not wedded to keeping both its telecoms and entertainment assets long-term. Fourtou said Vivendi might consider the gradual spin-off of the U.S. entertainment assets under the Universal brand, a move favoured by Vivendi Universal Entertainment co-chief executive Barry Diller. Vivendi rejected a recent $20 billion offer for those assets, but Fourtou said he would still consider all options. Reuters contributed to this report.
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