A court in France has fined Edgar Bronfman Jr., the chairman of Warner Music Group,5-million euros ($6.7-million) on criminal charges related to the prior bankruptcy of Bronfman’s former company, media conglomerate Vivendi Universal.
Bronfman was convicted of conveying false or misleading information about Vivendi in 2000-2002 and manipulating stock prices in 2001. He was also handed a 15-month suspended sentence.
The court also convicted Vivendi’s former CEO Jean-Marie Messier of misappropriating company funds and misleading investors.
Messier also received a three-year suspended prison sentence and fined 150,000 euros.
However, Messier was acquitted of charges that he manipulated Vivendi’s share price.
Two other ex-Vivendi executives, Eric Licoys and Guillaume Hannezo, received suspended prison sentences. Three others were acquitted.
“Messier appeared to have had, on the points that were important to the rise in the Vivendi Universal shares, statements of a nature to mislead investors,” the three-judge panel wrote in the decision.
Messier also “had awarded to himself, while the company was in grave difficulty, very large amounts, of a type to exacerbate its financial problems,” the judges concluded.
Vivendi expanded for being a water utility company into a prominent international media group in the late 1990s. However, the company’s stock price plunged more than 80 percent when Vivendi incurred huge debts in connection with the acquisition of the Universal movie studios and record label in the U.S., among other deals.
Messier and Bronfman went on a nearly $80-billion buying spree.
By the time Messier was fired by Vivendi’s board in the early 2000s, the company was burdened with 35-million euros in debt, forcing the firm to sell off many assets, including Universal.