wendel:-several-former-managers,-including-ernest-antoine-seilliere,-tried-on-monday-for-tax-evasion

Wendel: several former managers, including Ernest-Antoine Seillière, tried on Monday for tax evasion

Fifteen years after the events, fourteen people must appear for three weeks on suspicion of a financial arrangement aimed at deceiving the tax authorities on colossal amounts. Among them, former leaders of Wendel, including the former boss of French bosses, Ernest-Antoine Seillière. The trial begins this Monday 17 January. At his side, Jean-Bernard Lafonta, 40 years old, then at the head of the executive board, as well as eleven executives – former and current – and a former tax lawyer will have to explain themselves to the bar on an ultra-sophisticated profit-sharing program called Solfur. Ernest-Antoine Seillière was at the head of Medef, the French employers’ organization, from 1998 to 2005, then President of the European employers’ association Business Europe of 2005 to 2009.

The scholar Solfur scheme allowed at the end of May 2007 fourteen managers (one of them has since died) to recover 315 million euros in shares, i.e. 4.6% of Wendel’s capital, according to the accusation, “totally exempt from taxation”. For the National Financial Prosecutor’s Office (PNF), the gain then generated was artificially placed, via the interposition of companies, under a “suspended taxation” regime, with the aim of deferring or even, ultimately, avoiding payment. tax on these considerable capital gains. An interpretation disputed by the defendants, who refuted during the investigations any intention to defraud, ensuring that the assembly respected the law and the administrative jurisprudence of the time. Their lawyers, who did not wish to speak before the trial, will plead for release.

A heavy recovery in 2010

Concomitant with a global reorganization, the Solfur operation had caused turbulence within Wendel, a former steel giant that has become an investment company, still controlled by a family holding company bringing together a thousand descendants of Jean-Martin Wendel, founder of the group in Lorraine in 1998. In the months that followed, the difficulties of the Saint-Gobain group, in which Wendel had invested, but above all the financial crisis of 2008, had led to a tumble in the stock. Believing themselves wronged, some executives had taken legal action, denouncing a disastrous assembly in the end. In December 2010, only a few days before the tax prescription, all had been notified of a heavy adjustment: 240 million in total, including penalties.

And in 2012, the Ministry of Finance had transmitted to justice a volley of criminal complaints for tax evasion, leading to the opening of a judicial investigation. The investigations relied in particular on the exchange of emails on the development of the end 2005 and start 2007, between the managers of Wendel, their teams of lawyers and the bank JPMorgan Chase, in which the “tax risk” is carefully studied . The American bank, initially referred to justice in 2016 for complicity in tax evasion alongside the defendants, will however be absent from the court. In September, she agreed to pay million euros fine via a court settlement to close the proceedings.

“Not had d ‘other choice”

Presented as a “Mozart of finance” on his arrival as the group’s managing director in 2001 at 40 years, Jean-Bernard Lafonta, passed by the banks Lazard and BNP, had resigned in 2009 in the wake of this affair. Sentenced for insider trading and dissemination of misleading information then released on appeal, he must be tried from Monday for tax evasion but also for complicity: main beneficiary (79 million euros, ahead of Ernest-Antoine Seillière, 79 million), he is suspected of having incited executives to join Solfur.

During the investigations, several of between them claimed to have “had no other choice” than to accept the “package”, “turnkey”, after being assured of “perfect legality and tax compliance”. While some have long contested the tax adjustment, almost all executives have finally accepted a transaction with the tax authorities. A former tax lawyer then member of the renowned firm Debevoise & Plimpton, who helped shape the outlines of the arrangement, is also on trial for complicity in tax evasion. All incur 40.500 euros fine and five years imprisonment.

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