PARIS — The Paris prosecutor’s office has opened a preliminary inquiry into a complaint by Hermès International concerning LVMH Moët Hennessy Louis Vuitton’s acquisition of a portion of its capital, French media reported on Friday.
This story first appeared in the October 15, 2012 issue of WWD. Subscribe Today.
The probe will determine whether the prosecutor drops the case or hands it over to an investigating judge.
In its complaint, Hermès accused the world’s largest luxury conglomerate of insider trading, collusion and manipulating stock prices, according to a source familiar with the issue.
LVMH in turn has filed a suit against Hermès for “slander, blackmail and unfair competition.”
Spokespeople for LVMH and Hermès said they had no comment on the report, which appeared on the Web site of French business magazine Challenges. Officials at the Paris prosecutor’s office were not immediately available to comment.
LVMH surprised markets by revealing in October 2010 that it had amassed a 17.1 percent stake in Hermès via cash-settled equity swaps that allowed it to circumvent the usual market rules requiring firms to declare share purchases. It has since raised its stake to 22.3 percent.
French stock-market regulator AMF in November 2010 launched an investigation to determine if LVMH respected market rules, which it plans to refer to its sanctions commission early next year.
The Paris prosecutor’s office has also asked the AMF to weigh in separately on Hermès’ complaint. AMF president Gérard Rameix indicated in a recent TV interview that he did not think the company’s allegations were substantiated.