LVMH was heavy fine on "secret" question Hermes

  Central luxury products LVMH Bernard Arnault could before a heavy fine, if it is determined that they be

against financial arrangements for their involvement in the rival Hermes family.

A spokesman for the Financial AMF French said he was not on the details of the case so close to the meeting

of the Committee held on 31 Comment May, but said that LVMH would be appropriate to impose a fine for

violation of the AMF regulation.

The AMF maximum penalty can be imposed on a company € 100 million, 10 times the profits from activities in

violation of regulations.

According to a document of the AMF leak French daily Le Monde, LVMH launched a covert operation to build a

stake in Hermes - The manufacturer of the legendary Birkin bag.

The AMF investigation was initiated as LVMH announced in October 2010, he had managed to build a 14.2% stake

in Hermes. This was in violation of the Financial Regulations of the AMF, which forced them would explain

their increased involvement in 5% increments. This participation has risen to 22.6%.

At the recent Annual General Meeting of LVMH, 18 April Arnault said: "We had not planned We have made an

investment to the shareholders of Hermes, and found it in a way that we n" did not expect "..

But according to the report by the AMF LVMH acquired its interest through a network of secret transactions

under a variety of code names and with various banks and investment companies all over the world, so that

he, for his Hermes in its financial records.

The report notes that according to LVMH strategies to acquire a stake in Hermes in 2006, when the head of

Hermes and a member of the family, Jean-Louis Dumas, was forced began to look into retirement after 28 years

at the head when he was diagnosed with Parkinson's disease.

LVMH has several scenarios that allow him to take control of Hermes with the help of several large private

banks would be developed. According to the leaked report by the AMF was obviously a project code-named

"Mercury" - the Roman incarnation of the Greek god Hermes.

LVMH ended up with the structures of the derivatives complex actions for their participation in Hermes. They

bought shares through its investment in vehicles Luxembourg and Hong Kong, said that the AMF nowhere

mentioned in the accounts of LVMH.

These securities were then divided into three banks, one of which holds no more than 5% of them that they

were not necessary meant to explain their demands to the regulator.

After the death of Jean-Louis Dumas in 2010, LVMH Hermes swaps wanted in stock more than the money that made

the revelation that the company controlled by Arnault had held 14.2% of the billed Hermes. It was a total

surprise for Hermes, which at the time had no idea of ​​his rivals had bought a stake in the company.

Hermes is controlled by descendants of founder Thierry Hermes. In 2011, the Paris-based company has a

holding structure of the family require family shareholders shares to other family members offer before they

can be traded on the stock exchange, set to protect the company against hostile takeovers.