Orange chief receives one-year suspended jail sentence

Orange chief executive Stéphane Richard has been given a one-year suspended prison sentence by a French appeals court in a fraud case centred around late businessman Bernard Tapie, leaving his future at the telecoms company hanging in the balance.

Richard, who has been chief of Orange since 2011, had previously been acquitted in the long-running case, which relates to a position he once held in government as chief of staff to Christine Lagarde, then France’s finance minister.

Prosecutors had sought a three-year sentence against Richard. He was cleared on one count of fraud, according to Wednesday’s court ruling, but convicted of complicity in the misuse of public funds, receiving a suspended sentence as well as a €50,000 fine.

Orange, France’s largest telecoms group, declined to comment on the case, which is not connected to the company. But Orange’s board was due to meet later on Wednesday to discuss Richard’s position and whether he could carry on, said people close to the matter.

The French state has a minority stake in Orange, and finance minister Bruno Le Maire has previously said that top executives of government-backed companies would have to leave if convicted of a crime.

The case is centred on a €403m payout awarded by the government to Tapie, who had accused the state of defrauding him in a business deal from almost three decades ago, when he sold a stake in sportswear group Adidas to a state-backed bank.

The settlement had been approved by Lagarde, then working alongside Richard, but the payment was later criticised as excessive amid accusations it was a covert reward for Tapie’s support of former president Nicolas Sarkozy during his election campaign.

Tapie, known in France as the former chair of Olympique de Marseille football club, died in October. Lagarde, now chief of the European Central Bank, was found guilty in 2016 of negligence in public office.

Richard has long denied wrongdoing and said that he rejected all the accusations against him and would appeal against the verdict to a higher court. He added that his mandate at Orange was “in the hands of Orange’s board”. 

Orange has two “delegate” chiefs who could step up if Richard were to be replaced — Gervais Pellissier, who has been in executive roles at Orange since 2005 and deputy chief since 2009, and Ramon Fernandez, a former government adviser, who has been deputy chief since 2014.

In his time at the top, Richard has been a steadying hand at Orange, which was recovering from a crisis sparked by a wave of staff suicides when he took over. His appointment coincided with a tumultuous period in French telecoms following the rise of aggressive rivals such as Altice, which acquired SFR and Numericable, and Xavier Niel’s Iliad.

Orange, one of Europe’s largest telecoms companies alongside Deutsche Telekom and Vodafone, has attempted to revive its growth with overseas acquisitions and forays into different sectors, most notably media and banking. More recently it has focused on value creation by separating its towers business into a new company called Totem, and pursuing deals within some markets to strengthen its bases there, including Romania and Belgium.

Richard’s tenure has, however, been overshadowed by the Tapie allegations. He had previously argued that his removal would destabilise the company, including in 2018 when the French government backed him for a fresh mandate despite the prospect of a damaging fraud trial.

Additional reporting by Domitille Alain in Paris

Most Related Links :
Business News Governmental News Finance News

Need Your Help Today. Your $1 can change life.

[charitable_donation_form campaign_id=57167]

Source link

Back to top button