Italian prosecutors have indicted Vivendi’s former chairman Vincent Bolloré and current CEO Arnaud De Puyfontaine in a probe over alleged market manipulation stemming from legal wrangling prompted by Vivendi and Mediaset‘s botched 2016 pay-TV deal.
Bollore and De Puyfontaine had been placed under investigation in Milan in 2017 after Mediaset filed a suit claiming they plotted to drive down the company’s share price by premeditating to dishonor their 2016 deal to buy Mediaset’s Mediaset Premium pay-TV unit, and then allegedly used the devaluation caused by the botched deal to raid Mediaset stock.
Under Italian law, an indictment does not imply guilt. Nor does it necessarily mean that Bollore and De Puyfontaine will stand trial.
Vivendi in a statement on Saturday denied wrongdoing, claiming its current and former executives are “either extraneous to those allegations or have acted in full compliance with the law.” The statement added that Bolloré and De Puyfontaine’s attorneys “have already expressed full willingness to provide the necessary clarifications before the prosecutor’s office takes a decision, being confident that the decision will be the closure of the proceedings without charges.”
There was no comment from Mediaset.
Vivendi, which is the Paris-based parent company of Universal Music Group and pay-TV operator Canal Plus Group, in 2016 abruptly pulled out of a partnership agreement to buy Mediaset Premium in a share swap valued at about €893 million ($1.08 billion). Mediaset sued for breach of contract, claiming damages then estimated at €50 million ($56.6 million) per month — stemming from the drop in share price — for every month of delay.
After pulling out of the Mediaset Premium pay-TV deal Vivendi snapped up an almost 30% stake in Mediaset, becoming the company’s second shareholder after the family of former Italian Premier Silvio Berlusconi, founder of the Italian TV conglomerate, which holds a 44% stake in the company through their holding company Fininvest.
Since Vivendi swooped down on its stock, Mediaset has managed to have most of Vivendi’s voting rights frozen on antitrust grounds citing Italian media cross-ownership laws, as Vivendi also owns a large chunk of Telecom Italia.
Vivendi in its statement on Saturday said they have filed a complaint with the European Commission against Italy over this law, which Vivendi claims is a “blatant infringement of EU law.”