LVMH PROBED: Bernard Arnault’s quest for Belgian citizenship has run into another hurdle. The public prosecutor in Brussels has opened a preliminary investigation into the Belgian activities of his luxury group LVMH Moët Hennessy Louis Vuitton, which some Belgian media allege are letter-box entities. A spokesman for LVMH confirmed the launch of the probe on Friday, adding that the group had been informed by Belgian fiscal authorities in December that the inquiry would take place. This was not unusual in light of Arnault’s citizenship request, he added. The Brussels prosecutor also on Friday advised against granting the French luxury tycoon citizenship on the grounds that it was not proven that he has resided in the country for at least three years, as required by Belgian law. This echoed the opinion given by the immigration office of Belgium’s interior ministry last month.

“This is just one stage of the application process. It does not affect the final outcome, since a parliamentary commission will have the final say,” the LVMH spokesman said. In a statement issued last month in response to Belgian media criticism, LVMH and Groupe Arnault declared themselves “surprised” by the allegations concerning their Belgian entities, adding that the businesses, some of them long-established, “have perfectly real economic activities in Belgium.”

This story first appeared in the January 14, 2013 issue of WWD. Subscribe Today.

Arnault, chairman and chief executive officer of LVMH, has said he intends to remain a fiscal resident of France. Though he has not detailed his reasons for seeking Belgian citizenship, it is believed that Arnault is seeking to protect his empire from being broken up after his death by benefiting from more favorable Belgian inheritance tax laws.

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