Altice corruption probe deepens as French police conduct raids
Investigators search properties linked to alleged scheme to defraud Patrick Drahi’s company of hundred of millions of euros
Police in France have raided companies and properties across the country as a probe intensifies into an alleged scheme by employees and suppliers to defraud Patrick Drahi’s telecoms group Altice.
The country’s financial prosecutor said 15 homes and 14 companies in Île-de-France, Corsica, Var and Vosges had been visited simultaneously more than two years into a probe investigating “a vast, corrupt system” that operated “to the detriment of Altice group”.
More than 70 investigators were involved in the operation supported by Eurojust, an agency based in The Hague that facilitates cross-border serious crime investigations by EU member states.
Investigators also seized about €14mn from bank accounts as well as vehicles and luxury goods, the prosecutor’s office said. No formal charges have been brought.
The probe was opened after the July 2023 arrest in Portugal of Armando Pereira, Drahi’s fellow co-founder, kicking off a period of turmoil at debt-laden Altice just as it was looking to renegotiate its borrowing and considering asset sales to help relieve the pressure.
Pereira’s home in France was among the properties raided on Tuesday, his lawyers confirmed.
The Portuguese executive is suspected of running a scheme whereby Altice was overbilled on procurement and other contracts, leading to allegations that several hundred million euros were siphoned off illegally. Altice has previously said it was the victim of a scheme to defraud the company. Pereira denies wrongdoing.
“This complex scheme allegedly relied on a network of shell companies interposed between Altice and certain suppliers, enabling the overbilling of services and goods,” France’s financial prosecutor said on Tuesday.
“The funds thus obtained then allegedly fuelled money-laundering operations involving entities based in France and abroad, benefiting the main instigators of this system,” it added.
Altice declined to comment.
Pereira’s lawyers said they were pleased that, after two years, things were “finally moving forward”, adding that their client had been co-operating with the justice system and “strongly” supported a formal investigation being opened.
“We also hope that the Swiss, US Securities & Exchange Commission, and French justice systems will take a very close look at the activities and assets of Patrick Drahi and his associates in this case,” they added.
Drahi, who built Altice through debt-fuelled acquisitions, has previously denied knowledge of the alleged scheme and said the allegations had come “as a huge shock”.
Pereira was his right-hand man for decades. Altice conducted internal probes and cut ties with some suppliers in the months after Pereira’s arrest, which was the result of a three-year investigation by Portuguese authorities.
The raids coincide with high-stakes asset sales by Drahi as he looks to withdraw from telecoms altogether, having renegotiated Altice France’s €24bn debt pile this year in one of Europe’s biggest such restructurings.
Renegotiations on the debt of Altice’s international holdings are expected to kick off soon. Shares in Altice USA, the only listed entity in the group, have slid 95 per cent in the past five years.
An offer by a consortium of France’s three other telecoms groups — Iliad, Bouygues and Orange — to buy SFR, Altice’s operator in the country, was dismissed as too low last month, although the parties continue to believe a deal can be done. Any sale will face competition hurdles from regulators in Brussels and Paris.