FRANCE’s regulation authority, the Autorité des Marchés Financiers (AMF), has recommended that LVMH be fined €10 million (£8.5 million), over its purchase of a major stake in Hermès – the maximum charge given the timing of the gains. The AMF enforcement committee will come to a decision by July 31.
The AMF accused the luxury conglomerate of concealing its gradual acquisition of Hermès holdings, which now stands at 22.3 per cent, through cash-settled equity swaps dating back to 2001. LVMH did not announce news that it had a stake in the brand until October 21, 2010.
“[This is about] the information given to the public as soon as the preparation of the conversion [of the cash-settled equity swaps into shares], as soon as it could have an influence on the market,” said AMF board representative Philippe Adhémar.
LVMH strongly denied investing via questionable means, arguing that the company did not slowly and secretively accrue shares. The luxury firm’s lawyer, Georges Terrier, and vice president Pierre Godé called for the case to be annulled, saying that it was impossible for the committee to come to an unbiased decision based on Hermès’ recent “damning media campaign” against the company.
“For more than two years, one of [Hermès'] executives has been waging a campaign of denigration and slander against LVMH that is extremely detrimental to LVMH’s image and reputation,” said Godé, WWD reports. Thanks to Ella Alexander, vogue and WWD for the news.