On July 9, the Paris Criminal Court acquitted Stéphane Richard, the Chairman and Chief Executive Officer of mobile telecommunications company Orange, French businessman Bernard Tapie, and four other defendants on charges of fraud and misuse of public funds by Tapie. Although French prosecutors had sought a three-year prison term (half that time to be suspended) and a €100,000 fine for Richard and a five-year prison term for Tapie, Presiding Judge Christine Mee stated, in reading the verdict, that “[t]here was no proof that Richard took part in any fraud.”
The case traces back to 2008, when Richard was serving as chief of staff to then-French Minister of Finance Christine Lagarde. At that time, Tapie asserted that he had been defrauded by Crédit Lyonnais, the former French state-owned bank, “when it encouraged him to sell his stake in sports equipment group Adidas for less than it was worth in 1993.” The French government then agreed to arbitration in the case, resulting in a €403 million award to Tapie.
That award, however, became the subject of intense political controversy, as some alleged that the award was a “covert reward” to Tapie for his support of then-French President Nicolas Sarkozy’s election campaign. Subsequently, another Paris court invalidated the arbitration award and ordered Tapie to repay the money.
In 2016, the Cour de Justice de la Republique, which specializes in ministerial misconduct, convicted Lagarde – by then head of the International Monetary Fund – of negligence, on the ground that she “should have done more” to overturn the arbitration award to Tapie. Because that court did not impose a fine or prison term, Lagarde was able to remain as head of the IMF.
Despite the prior conviction of Lagarde, Presiding Judge Mee supported the decision by the Finance Ministry, stating that that Tapie’s claims weren’t “non-existent” and that “[c]hoosing to resolve the dispute via arbitration ‘wasn’t, in principle, contrary to the state’s interests’.” The court also “found ‘nothing in the case that confirmed’ the allegation that the arbitration payout was tainted by ‘fraud’.”
Note: The verdict is a considerable relief not only to Richard and the other acquitted defendants, but to Orange employees, who valued Richard’s sustained leadership at the company. It is also a rebuff to French prosecutors, who had pursued Richard and Tapie despite an apparent lack of proof that either man had corrupt motives or received a corrupt benefit from the arbitration award; and, indirectly, to the Paris court that invalidated that award.