Lawyers representing the state of California questioned French tycoon Francois Pinault in Paris on Friday over his alleged role in the illegal buyout of bankrupt insurer Executive Life.
Pinault's questioning was led by Gary Fontana, an attorney for the California Department of Insurance, which is suing Pinault for US$1 billion and the French state and other parties for US$2 billion.
Pinault, who controls the retail and luxury empire Pinault-Printemps-Redoute SA, declined to comment as he arrived at the courtroom.
The civil suit follows a deal with California prosecutors last November in which Pinault, the French state, bank Credit Lyonnais and insurer MAAF agreed to pay US$772 million to settle criminal charges against them.
Pinault contributed US$185 million to the settlement and the French government paid US$475 million, averting the embarrassment of defending itself against criminal charges.
MAAF and others took over Executive Life on behalf of then-state owned Credit Lyonnais in 1991-1992 after the insurer went bust, taking policyholders' investments with it. US law barred banks from controlling insurance companies at that time.
Pinault, who had spied a potential bargain in the form of the failed insurer's junk bond portfolio, subsequently bought Executive Life from a Credit Lyonnais subsidiary.
Pinault's holding company, Artemis, acknowledged that he made a multibillion dollar profit by selling the portfolio when markets picked up but denied he had done so in the knowledge that the buyout had broken US law.
Fontana has already interrogated French officials and former MAAF and Credit Lyonnais employees after talks on a possible out-of-court settlement failed to make progress.
The pressure is now increasing on both sides ahead of the court action, scheduled for February in Los Angeles.
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