From New York penthouse to Paris jail cell. Jean-Marie Mes-sier's arrest for suspected insider trading and share price manipulation is a new low for the former boss of Vivendi Universal, who once made headlines with his jetsetting lifestyle.
Messier presented himself voluntarily at fraud police headquarters in Paris and was taken into custody on Monday, almost two years after being ousted from the top job at the media and telecoms group.
Messier could remain in custody for up to 48 hours before a decision is taken on whether to place him under formal investigation. His detention is just another stage in the painfully long fall from grace of a man once revered as the embodiment of a new entrepreneurial culture and market savvy taking root in France.
After taking over in 1996 as chief executive officer of water company Generale des Eaux, Messier set about transforming it into a multinational media and telecoms group including the Universal film studios and music label in the US, European pay-TV station Canal Plus, a French publishing arm and the country's No.2 mobile operator.
The price of his acquisition spree only became apparent in 2002, when Vivendi's share price collapsed amid a cash crisis in which Vivendi almost drowned in about US$42 billion of accumulated debt.
Messier was sacked -- but not before he had negotiated a US$25 million severance package.
But a group of small shareholders, APPAC, filed a complaint accusing former Vivendi bosses of covering up a financial crisis that began much earlier. It is also suing current Vivendi chairman Jean-Rene Fourtou for agreeing to pay a US$50 million settlement with the US Securities and Exchange Commission without consulting shareholders.
More than 18 months into their investigation, police suspect that Messier and his top executives issued misleading financial reports and carried out illegal share buybacks to prop up the company's stock price -- while using their privileged information to profit from their own trades in the company's stock.
France's Financial Markets Authority concluded its own probe last year but has yet to publish its results.
According to a prosecution document, the watchdog's report said Messier and his former chief financial officer Guillaume Hannezo sold Vivendi shares or bought options to sell them just weeks before Vivendi's financial situation began to unravel.
Messier sold US$18.7 million in shares in December 2001, the document says, while Hannezo bought options to sell shares later at a prearranged price, locking in a profit of US$1.69 million.
Vivendi's share price fell by 5 percent on Jan. 7, 2002, after it announced a US$4 billion share sale to rein in its alarming debt.
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