PARIS — The pressure keeps ratcheting up in the Bettencourt affair.
This story first appeared in the October 1, 2010 issue of WWD. Subscribe Today.
A L’Oréal shareholder and a Swiss distributor lodged complaints Thursday with the prosecutor’s office here against L’Oréal president Lindsay Owen-Jones and Liliane Bettencourt, alleging misuse of corporate funds linked to past contracts L’Oréal granted to photographer François-Marie Banier.
It’s the first time such complaints have been lodged against the two individuals, claimed Frédérik-Karel Canoy, the lawyer representing Janez Mercun and his firm Temtrade, which for 25 years distributed L’Oréal products for Eastern Europe.
A spokeswoman for L’Oréal and another for Bettencourt had no comment.
Mercun and Temtrade take issue with L’Oréal contracts that had paid Banier 710,000 euros, or $968,020 at current exchange, per year. They claim the money granted to Banier did not correspond to a real service and went against the social interest of L’Oréal, according to Canoy.
On Sept. 19, L’Oréal said it had ended its contracts with Banier.
L’Oréal’s link to Banier was first put into the spotlight in July, when a company shareholder filed a complaint in Paris “against X.” He alleged Banier benefited from a contract of convenience. A preliminary enquiry was then opened by the public prosecutor’s office.
That preliminary enquiry was one of many that had been initiated since Françoise Bettencourt Meyers, Bettencourt’s daughter, brought initial legal proceedings against Banier in December 2007. She alleges Banier exploited the weakness of her 87-year-old mother, who gave him assets valued at about 1 billion euros, or $1.36 billion.
An interview with Owen-Jones, billed to be the first since the Bettencourt affair broke, appeared in Le Point magazine on Thursday. In it, he is asked about L’Oréal’s having ended the 10-year contracts, which were initially meant to run through 2011.
“In the beginning, Mr. Banier was recommended to us by Mr. or Mrs. Bettencourt, who sometimes sent us artists when they found their project interesting,” said Owen-Jones. “But we were left free to decide. Mr. Banier was received in 1991. He was young and apparently without a dime. He wanted to publish a book of photographs. At the time, L’Oréal had a slight complex: We weren’t ‘cool’ enough. It’s necessary to remember that at that time the group was primarily known for its shampoos, hair sprays, soaps….We hardly had links with the world of arts and culture. We were looking to approach it. We didn’t finance Mr. Banier’s book but we committed to buying 500 copies of it for company gifts. The work made a certain stir, so we helped him to realize a second, then we formalized our relation with him in signing two contracts, in 1996: One for organizing expositions and the other for the services of advising in artistic matters. They were renewed in 2001 because they showed their usefulness.”
Le Point referred to a letter dating from 2001 that had been seized by the police and said that Owen-Jones had recommended the renewal of the contracts in indicating to Bettencourt, “That corresponds to your wish to reassure our friend.”
“It was an expression of politeness,” said Owen-Jones. “It is evident that it was a pleasure for Mrs. Bettencourt.”
Owen-Jones said that is worlds apart from contracts of convenience.
In response to the question regarding why the contracts were terminated, he said, “Jean-Paul Agon [L’Oréal’s chief executive officer] and I wished for some time already to stop them because the young, destitute artist from 1991 is no longer today neither young nor — apparently — destitute, but we were held by the contracts and didn’t wish to open a new judicial front. The media buzz around this affair constituted a major case that allowed us to break the contracts in advance to preserve L’Oréal’s reputation. The decision was taken during the summer but wasn’t made public until some weeks later.”
(During a financial analyst meeting on Aug. 26 at L’Oréal headquarters in the Paris suburb of Clichy, Agon addressed questions about Banier’s contracts. He said Banier provides a “real service” but wouldn’t elaborate further, explaining he reserved his response for a legal enquiry.)
In the Le Point article, Owen-Jones was asked whether he considers Banier as a friend. “Absolutely not,” he replied.
Owen-Jones also acknowledged having received a gift of 100 million euros, or $136.3 million, from Bettencourt in 2005.