Hermès Becomes Plaintiff in Case Against Former French Security Chief

PARIS — Hermès has become a civil claimant in a criminal case against France’s former head of intelligence, Bernard Squarcini, a spokeswoman for the French luxury firm has confirmed.

Squarcini was recently indicted for breach of confidentiality, influence peddling and misuse of public money, and is suspected of using his police contacts to obtain confidential information for private clients through his own intelligence firm, founded in 2013, according to reports. Among those clients was LVMH Moët Hennessy Louis Vuitton, which is not targeted by the legal proceedings.

LVMH has firmly denied some French reports suggested Squarcini may have initiated surveillance of Hermès family members in 2014, potentially providing information that may have helped LVMH in its legal battle against its rival.

The case has made headlines here, with some media outlets suggesting that it could reignite a legal battle that pitted Hermès against LVMH from 2010 to 2014 after the latter acquired a stake in its rival. Sources close to both companies say they do not wish to rock the boat of their 2014 peace deal.

Squarcini was contracted by LVMH to work on intellectual property issues, the company has confirmed, but denies having ordered surveillance of members of Hermès’ founding family or executives. “The LVMH Group would like to state that it entrusted no such mission to anyone,” the company stated.

“On the contrary, Bernard Squarcini, missioned at the time with defending LVMH’s interests in fighting counterfeiting, was informed by intelligence services of hostile moves against the group. He saw fit, in the circumstances, to send LVMH an offer to react to this; it was not accepted,” LVMH said.

A Paris source confirmed press reports that Squarcini had discovered that Hermès had itself already engaged a private intelligence firm, Axis & Co., to protect the company’s interests.

Squarcini’s proposal, in 2014, came at a time when both parties had already begun negotiations to bury the hatchet in the famous dual that saw them at loggerheads over LVMH having quietly amassed a stake in its rival.

In 2010, LVMH revealed it had purchased a 17.1 percent stake in Hermès via cash-settled equity swaps. In November 2014, after lengthy negotiations, LVMH agreed to distribute its stake in Hermès to shareholders through Groupe Arnault and agreed that neither LVMH, Groupe Arnault nor Christian Dior SA would acquire further shares in Hermès until at least 2019.

Hermès decided to become a civil claimant in the criminal case against Squarcini and Laurent Marcadier, who was a magistrate at the time of the events but has since become LVMH’s head of security, after the judge in charge of the case recently brought to the luxury group’s attention that Squarcini had potentially initiated surveillance of it. This allows Hermès access to the details of the case, which does not yet have a confirmed date.

Said to be close to former French president Nicolas Sarkozy, Squarcini was ousted as head of the then Central Directorate of Interior Intelligence, now called the General Directorate of Interior Intelligence, the French equivalent of the FBI, after François Hollande came to power. It was after this that he set up his own security firm.

The news broke here just ahead of the Nov. 20 first round of elections to nominate a new head of the Republican party to compete in next year’s presidential elections. Sarkozy was eliminated in the first round, with his former prime minister François Fillon beating rival Alain Juppé to lead the party in the second round on Nov. 27.