Luc Besson's EuropaCorp Defends Itself Against Embezzlement Allegations

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Luc Besson

UPDATED: The company announced plans to sue for defamation and denied reports of wrongdoing in securing public financing for the Cite du Cinema studio complex.

PARIS – French studio EuropaCorp announced Monday it plans to sue over a weekend report in the newspaper Le Parisien that alleged it misappropriated and possibly embezzled public funds.

"EuropaCorp and some of its shareholders have asked their counsel Mr. Jean-Marc Fedida to initiate criminal proceedings for the offense of dissemination of false or misleading information," it said in a follow-up statement issued Monday afternoon.

In addition, the company will pursue defamation claims against the journalist and the paper's managing editor.

The company defended itself over the weekend after Le Parisien's report claimed the company's financing of founder Luc Besson's pet project, the Hollywood-style film studio Cite du Cinema, was tantamount to "embezzlement of public funds."

The newspaper also said the company may be under investigation by the French ministry of justice after a confidential memo was sent to Minister Christiane Taubira following an earlier audit court investigation that leveled the possible embezzlement charges.

In a statement released late Saturday night, EuropaCorp said it was "astonished" by the newspaper's charges and claimed that it had "no knowledge" of the audit court report, and that company officials "had not been questioned by anyone."

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"EuropaCorp regrets that this magnificent achievement is being held hostage to settle political accounts," it said in the statement.

Le Parisien said that the initial audit court report found that $142 million (€105 million) in government financing the project received for construction "may characterize the crime of embezzlement of public funds."

Government financing for the project was first denied in 2004 but ultimately approved in part because of a push by insiders in the Elysee Palace. The court report cited former EuropaCorp CEO Christophe Lambert's close ties with former President Nicolas Sarkozy, who expressed strong support for the project. "The close relationship of Luc Besson and some of his collaborators within the state's highest circles may have favored an intervention of public figures," the report said.

The public money was ultimately given "against the advice of government services" and on "very favorable terms" by the Caisse des Depots et Consignations (CDC), which ultimately financed 75 percent of the project. The government-backed CDC's mandate is to "serve the general interest and economic development of the country" and is the French funding body for public works.

It's the final financing arrangement that brings up the embezzlement charges, as the favorable terms benefited the private company, which was acting in its own interest, the report says.

EuropaCorp's statement defends the financing arrangement.

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"Luc Besson was the initiator; he put his reputation and energy into this project -- which he does not own -- without drawing a personal financial gain."

"As is often the case for public facilities, it was funded by a public-private partnership," the statement says, citing the CDC and the private construction behemoth Vinci Group as financiers and owners of the center that houses the cinema schools and production company offices. The CDC and Vinci Group expect a return of around 6 percent per year, "within industry standards," EuropaCorp said.

"It should be noted that EuropaCorp has received no public funding of any kind."

The studio, which houses nine soundstages, opened in September 2012 and has since seen Besson's The Family, with Robert De Niro and Michelle Pfeiffer, and McG's Three Days to Kill, starring Kevin Costner, shoot on the grounds in a Paris suburb.