PARIS — Right on the heels of settling the Gucci Group contract imbroglio, French retail and luxury baron François Pinault has extricated himself from another tricky issue — the Executive Life affair.
Pinault is alleged to have played a fraudulent role in the acquisition of the failed California insurance company.
The French government on Thursday said it had reached a settlement with U.S. prosecutors over allegations that French bank Credit Lyonnais had broken a state law by buying Executive Life when it was illegal for banks to own insurers.
Pinault was targeted because he bought Executive Life’s junk bond portfolio from the bank, making huge profits. The entrepreneur has denied guilt, saying that he was unaware Lyonnais had broken the law.
The deal is expected to be signed on Monday, French Finance Minister Francis Mer said on French radio. Sources close to the negotiations said France will pay $475 million and that Pinault will pay separately $185 million. Meanwhile, Lyonnais will pay $100 million and the Maaf insurance entity will foot the remaining $10 million of the bill.
News of the deal sent Pinault-Printemps-Redoute stock up 3.46 percent to $96.75, or 79.30 euros, in trading on the Paris Bourse. Pinault controls Gucci Group through PPR.
Negotiations had intensified over the last few months as multiple deadlines had expired without the parties reaching common ground. Last week, Paris scuppered a deal because it did not include Pinault. And late Tuesday, prosecutors declined a separate $180 million settlement with Pinault.
The affair, in which French taxpayers are expected to foot much of the bill, has ignited a potentially embarrassing situation for French President Jacques Chirac.
Opposition politicians have accused Chirac of cronyism because he is close friends with Pinault. Last week, Chirac officially denied that the relationship was influencing negotiations.
Although Pinault had been granted immunity in the federal case, prosecutors ratcheted up pressure by targeting some of his close advisers. Pinault still faces possible fines in a civil suit, likely to be heard in 2005.
Sources said talks had failed because prosecutors wanted Pinault to admit guilt as part of the settlement. He had refused since an admission of guilt could influence the civil suit.It is believed $110 million of the fines Pinault will pay are nonreimbursable even if he is cleared of all guilt in the civil case. A spokeswoman for Pinault declined all comment.
Alberta Ferretti's "Rainbow Week" sweaters are back. The designer closed her #MFW show with a few day-of-the-week sweaters, which first debuted on the catwalk last January as part of the pre-fall 2017 collection. #wwdfashion (📷: @delphineachard)