The extraordinary saga of the Hermès International shares allegedly lost by Nicolas Puech, the dissident heir to the venerable luxury house, is causing concern at LVMH and for its majority shareholder, Bernard Arnault.
It has emerged in recent days that the son of Yvonne Hermès, a fourth-generation member of the founding family, issued proceedings in the spring against Bernard Arnault and the LVMH group, as well as several other parties, in a civil action seeking approximately €14 billion in compensation for six million shares (representing up to 5.7% of the group’s equity) of which he claims to have been deprived. The matter came to the fore in the media following the first hearing of the case on 20 November at the Paris Judicial Court.
DR
Initially discreet, the luxury giant issued a strongly worded statement on Wednesday evening, asserting that “LVMH and its shareholder strongly reaffirm that at no time did they misappropriate shares in Hermès International, in any way or without anyone’s knowledge, and that they do not hold any ‘hidden’ shares.”
Beyond its official position, the group of 70 houses also denounced the fact that, according to its directors, “for several weeks now, an obviously coordinated press campaign” “has been targeting the LVMH group”, which “reserves the right to take any action necessary to assert its rights.”
Amid LVMH’s acquisition of the media outlet Challenges, which has raised questions about the magazine’s editorial independence, the leadership’s assessment of the coverage reflects a pronounced distrust of the press.
So what is at issue? Libération was the first to report on November 20 hearing in an article on November 27, as well as on the summons served on the LVMH group, which also targets Bernard Arnault via his two companies, Agache and Financière Agache. Since then, Puech has spoken out in the pages of L’Express. Glitz, which has long followed the case of Puech’s missing shares, has published a detailed investigation into the mechanisms put in place by Eric Freymond, Puech’s wealth manager, to channel funds to the United Arab Emirates, particularly Dubai.
For its part, Le Canard Enchaîné has written that judges Anne de Pingon and Serge Tournaire will question Bernard Arnault in the coming weeks.
Le Canard also reports on the early July hearing by the French judiciary of Freymond, Puech’s wealth manager, who is said to have confided in the judges and affirmed his links with the French luxury magnate. The heir accused the man to whom he had entrusted his fortune for more than twenty years of having misappropriated his share portfolio. Alas, he will be unable to provide further information; Freymond died in mid-July in Switzerland. Media outlets also recall the history between LVMH and Hermès.
While it appears that the 82-year-old Puech — who first brought proceedings in Switzerland in 2022 against his former trusted adviser — now wishes to clarify his case by speaking publicly, the subject is attracting keen media interest. It combines the intrigue of a multi-billion-euro fortune that has evaporated, the recent death of a key witness, and the resurgence of one of the century’s most epic stock-market battles, pitting the heirs of a centuries-old house against the vision of a conquering tycoon — now France’s richest man — with a betrayal worthy of the Medici. All of which helps explain the press’s sharpened interest.
The story has its roots around fifteen years ago, when LVMH, through discreet transactions, gradually increased its stake in the venerable saddler founded in 1837, without attracting the Hermès family’s attention.
Arnault finally revealed his hand in 2010, holding 14.2% of the shares with the possibility of increasing this to 17.1%. The family’s representatives immediately voiced their disapproval and, led by Axel Dumas, went to “war” with LVMH, whose chairman maintained that he had no intention of acquiring the historic brand, even as the stake rose to 23.2% of the capital. In this conflict, Puech, with his 5.7% stake, appeared at the time to be a Trojan horse in the offensive of the billionaire who had already taken over Louis Vuitton. He chose not to join the family holding company H51, which held 51% of the capital, created in 2011 by family members to block attempts by external players to take control. In the end, LVMH withdrew from Hermès’s share capital in 2014, distributing Hermès shares to its own shareholders, and Bernard Arnault sold the shares held by his family companies.
“LVMH and Hermès International reached an agreement in September 2014 under the aegis of the president of the Paris Commercial Court, and two investigating judges issued an order of dismissal in October 2015, following the submissions of the National Financial Prosecutor’s Office and Hermès International’s withdrawal as a civil party,” recalled the world’s number one luxury goods company.
Ultimately, this operation, for which LVMH was fined €8 million by the Autorité des Marchés Financiers, is said to have generated around €3.8 billion in capital gains for Bernard Arnault’s group.
Today, Puech, who denies ever having supported Arnault’s rise in Hermès International’s share capital and says he was betrayed by Freymond, has targeted several players in his summons, including LVMH and its shareholder, and has turned to the French courts to try to shed light on the disappearance of his shares.
LVMH and the Arnault family deny these accusations by Puech, “who has decided to turn to the French courts after having been dismissed by the Swiss courts on numerous occasions”.
The French press will be all the more attentive to the decisions of the Paris court in this intriguing case worth more than €14 billion.
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