Biggest
fine ever of its kind
The
Autorité des Marchés Financiers (AMF) has issue with the way LVMH acquired a
part of Hermès. The French exchange watchdog even demanded a fine of ten
million euro, but even the fine of eight million euro is still the biggest one
ever for this kind of exchange disputes.
The
authorised AMF commission especially condemns “the bypassing of all possible
rules that are in place to guarantee the transparency that is necessary for the
smooth operation of the exchange”. It also said there were “serious consecutive
shortcomings that existed to mask all stages through which LVMH acquired part
of Hermès”.
Through a
complex system of equity swaps LVMH succeeded in getting 17 percent of shares
of Hermès in the fall of 2010, without notifying exchange authorities. When the
manoeuvre was found out, LVMH was already 22.6 percent owner of Hermès.
LVMH
appeals
Immediately
after the verdict of the French watchdog, LVMH announced it would appeal the sanction.
“The principle of the sanction, and the amount, is completely unjustified”,
they said at headquarters in Paris. LVMH firmly
denies not fulfilling its duty to inform and it is determined to show “the real
course of events” to the Court of Appeal in Paris.
The company
also states that the fine does not question the validity of the operation,
meaning LVMH will remain owner of its shares in Hermès. For now, because to
have those transactions undone, Hermès has already filed a complaint last year.
That “affaire” is currently ready for review at the Trade Court: the last word
has not yet been said about this…
