The Telegraph
Since 1st March, 1999
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Vivendi in fresh trouble

Paris, Nov. 4 (Reuters): French-American media group Vivendi Universal, still struggling with the legacy of ousted chief executive Jean-Marie Messier, said on Monday the United States authorities had launched two new investigations into the company.

In a brief statement, Vivendi said the US Attorney’s office for the Southern District of New York had opened a preliminary criminal investigation into the company and was co-ordinating with the Securities and Exchange Commission’s (SEC) Miami, Florida office, which has been conducting an informal inquiry.

A source familiar with the situation said that the two investigations were new and had not been made public before. “Vivendi Universal intends to co-operate fully with those preliminary investigations,” the company said, declining further comment. Further details on the nature of the investigations were not immediately available.

The investigations come as Vivendi struggles to persuade its lender banks to fund its move to control cash-rich 44-per cent owned telecoms group Cegetel, currently the object of a takeover bid by UK cellphone giant Vodafone.

Vivendi is already the object of investigations by the French bourse regulator COB and French justice officials, who are looking into whether the company issued misleading statements on its financial condition during the tenure of former chairman Jean-Marie Messier.

Messier and his team also face several other lawsuits in the United States, where some individual shareholders are seeking class-action status.

Vivendi shares stood 3.09 per cent higher at 12.68 euros at 0900 GMT, in line with a stronger DJ Stoxx European media index. The company's stock has crumbled 79 per cent this year.

During his six years at the helm of the company, Messier transformed a sleepy utility called Compagnie Generale des Eaux into the world’s second largest media group, by purchasing entertainment assets including Seagram and Barry Diller's USA Networks.

But he was ousted in July after Vivendi’s share price collapsed and the company fell victim to a cash squeeze that brought it dangerously close to default.

Vivendi’s new management team is trying to pick up the pieces, targeting asset sales of some 12 billion euros over the next 18 months, while struggling to maintain control of its cash cow Cegetel. However, Vivendi has found it difficult to move beyond the mess left by Messier.

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