International / 10 July 2019, 2:30pm / Emmanuel Jarry, Gwénaëlle Barzic
INTERNATIONAL – A French court on Tuesday cleared Orange Chief Executive Stephane Richard of any wrongdoing in a fraud trial, cementing his position at the helm of the country’s biggest telecom operator.
The case dates back to a 400 million euro ($448 million) state payout to tycoon Bernard Tapie over a decade ago after the businessman accused the state of defrauding him in the resale of his stake in sportswear brand Adidas to a state-controlled bank.
“It is obviously a great joy, a great relief,” Richard told reporters inside the courthouse.
“I’ve lived for years with this accusation against me, from which I have always defended myself with the greatest vigor.”
The verdict ends a trial that had become a distraction for Richard when the former telecoms monopoly faces strong competition in a fragmented domestic market and pressure to invest heavily in high-speed internet infrastructure for its fixed and mobile businesses.
The judges ruled that the 2008 payment to Tapie was legal, was the result of a political choice and was not contrary to the interests of the state.
Prosecutors may however appeal the ruling, meaning the saga could yet drag on for months.
Richard had faced charges of complicity in fraud and misuse of public funds in his role as chief of staff to then finance minister Christine Lagarde. Lagarde was convicted of negligence over the affair in December, 2016.
The clearing of Richard of any wrongdoing may ease the pressure on Lagarde when she faces questioning by European lawmakers over her nomination to head the European Central Bank.
Tapie, the former owner of Olympique Marseille soccer club, who is battling cancer, was also cleared of wrongdoing.
“Today I only have one thought: my cancer has taken a big hit,” Tapie told the newspaper La Provence, in which he is a majority shareholder. “It’s proof that you should always fight until the end.”
Tapie’s lawyer said he expected the prosecutor to appeal.
“PEACE OF MIND”
Richard has been in charge at Orange since 2011 but his future had been in doubt ahead of the verdict.
The French state is Orange’s biggest and controlling shareholder. Before the ruling, Finance Minister Bruno Le Maire had repeated the government position that bosses of state-controlled companies should quit if convicted of a crime.
A popular chief executive, Richard is credited with improving revenues and market share in the fiercely competitive French telecoms market and restoring relations with unions after a spate of suicides shook the company.
“(The court decision) is a huge relief for Orange’s staff,” Sebastien Crozier, the union leader for CFE-CGC at Orange, told reporters.
“It will allow us to manage the future and the new digital challenges wither greater peace of mind.”
The group made no comment after the ruling.
Richard said in February he would present a new strategic plan dubbed Vision 2025 later this year. The CFDT, another union at Orange, stressed in a statement that it expected the current company’s strategy as laid out by the CEO to be pursued.
Orange’s shares were unmoved after the announcement of the verdict.
“In recent months, the evolution of the share price was not directly related to this case,” said Sebastien Beyazian, an analyst at MainFirst Bank.
“We’re really focused on the group’s strategy, and this decision signals the continuation of the current strategy.”