Luc Besson's EuropaCorp Fined by French Authorities
The company faces a $252,000 fine for misleading investors
Luc Besson's mini-major film studio EuropaCorp faces a $252,000 (€200,000) fine from the French Financial Market Authority (AMF) for providing investors with inaccurate financial information in 2009 and 2010.
The AMF cited statements the company issued in 2009 and early 2010, just before it faced financial losses, saying they misled investors. Specifically, the AMF considered a press release dated April 15, 2010 in which the company referred to its operating margin as "particularly low" as not “sufficiently precise to enable an investor to anticipate annual operating income and a negative net result.”
The company reported its first negative results later in the year, but the AMF believed EuropaCorp could already anticipate the losses, and yet failed to communicate that with investors.
“The information that the company anticipated negative results was particularly important information to the public, [since] such a situation was unprecedented since its IPO,” the decision read. It continued: “The information given to the public did not meet the criteria of accuracy and sincerity required.”
In a statement released this afternoon, EuropaCorp noted the decision and said that it will be reflected in its future financial reporting. The sanctions do not reflect accounting irregularity, it added, but only reporting.
“EuropaCorp takes careful note of the decision of the AMF, which will be taken into consideration for its future financial communication and welcomes the fact that the sanction does not affect any element of accounting, but only two elements of past financial communication,” the company said in a statement, noting that it had been handled by former management.
EuropaCorp co-founder and former second-in-command to Besson, Pierre-Ange Le Pogam left the company in early 2011. Le Pogam was dismissed by EuropaCorp for what it called "gross negligence," but a French labor court found that the company had not established their claim and fined it $884,000 (€700,000) in August 2013.
The €200,000 final sanction was less that the originally requested €300,000; still, EuropaCorp says it finds the sum “disproportionate" and may take legal action. It may not be the end of the case for the company. “EuropaCorp reserves the right to appeal this decision,” it concluded.