Warner Music Boss Edgar Bronfman Jr. Fined $6.7 million
NEW YORK - A French court on Friday fined Warner Music Group chairman and CEO Edgar Bronfman Jr. 5 million euros ($6.7 million) and convicted him of “conveying false or misleading information” about Vivendi Universal when he was a top executive there.
Bronfman was also convicted of manipulating stock prices as part of certain stock trades and given a 15-month suspended prison sentence, the Associated Press reported.
Warner Music, which has just hired Goldman Sachs to explore a possible sale of all or parts of the company, said Friday that Bronfman has vowed to appeal. “I am disappointed that the court differed with both the Paris public prosecutor and the lead civil claimant in the case, APPAC, who both took the position that I should be acquitted,” he said in the statement. “As I have consistently stated, my trades were proper.” Under French law, the fine is suspended until a final resolution.
Scott Sperling, the chair of the company’s executive governance and nominating committee said: “The board of directors is disappointed with the decision in this matter, and fully supports Mr. Bronfman as he appeals this verdict.”
Meanwhile, the AP reported that the court also convicted former Vivendi CEO Jean-Marie Messier of misusing company funds – via a 20 million euros severance package that he eventually renounced - and misleading investors, handing him a three-year suspended prison sentence.
Two other former Vivendi executives, Eric Licoys and Guillaume Hannezo, also got suspended prison sentences.
In a similar trial in New York a year ago, a Manhattan court ruled against Vivendi SA in favor of U.S. and European shareholders who argued that the company had lied about its financial health.
Under Messier, Vivendi went on an acquisition spree that eventually created Vivendi Universal in a deal with Bronfman's Seagram, but the company soon found itself laden with high debt. That led to Messier’s ouster and asset sales, including Vivendi’s sale of Universal to General Electric to form NBC Universal, in which Vivendi retained a minority stake.