Ex-Casino chief Jean-Charles Naouri found guilty of corruption
Former stalwart of French establishment and three other ex-Casino executives convicted by Paris court
Former Casino chief executive Jean-Charles Naouri has been found guilty of corruption and disseminating false information, in a conviction that caps a remarkable fall from grace for a former stalwart of the French establishment.
The case brought by the French financial regulator and the country’s financial prosecutor covered events that took place around 2018, when shares in indebted French grocery retailer Casino were among the most heavily shorted in Europe.
The court found that Naouri and three other former Casino executives attempted to prop up its declining share price, including by spreading false rumours in the media that the company was a takeover target for its rival Carrefour.
Naouri was sentenced to four years in prison, three of which are suspended and the other served under electronic surveillance. Lawyers for Naouri, who was also fined €1mn, said he was immediately filing an appeal.
The court ruled that Casino’s management paid a journalist €823,000 to publish false and misleading information about the company. The journalist and the three other former Casino executives, who were not named in Thursday’s judgment, were also found guilty of corruption and disseminating false information.
The journalist and one of the former executives were also found guilty of insider trading. The court acquitted all defendants of market manipulation.
Lawyers for Naouri said in a statement that he “is confident that the Court of Appeal will acknowledge the reality of Carrefour’s takeover bid for Casino” and that the services provided by the journalist were unrelated to the Casino share price. “He remains determined to continue his fight so that justice may ultimately recognise his complete innocence,” they added.
Casino was fined €40mn, half of which was suspended, for corruption and disseminating false or misleading information.
Born in Algeria, 76-year-old Naouri won places at elite French universities and worked for the French government and Rothschild in the 1980s, before striking out on his own as a financier.
He acquired a string of French retailers in the 1990s and early 2000s, eventually controlling a multibillion euro retail conglomerate with operations in France, Brazil and Vietnam through a complicated series of holding companies.
Naouri’s empire first came under pressure about a decade ago, when US short seller Muddy Waters published a scathing report arguing that the heavily indebted financial structure behind Casino resembled “a highly levered hedge fund”.
In 2018 Casino announced Carrefour had approached the company about a takeover bid, forcing the rival retailer to clarify that no formal offer had been tabled.
While Naouri was initially able to brush off the attack, a slump in Casino’s share price forced him to place the investment holding companies through which he controlled the retailer into bankruptcy protection in 2019.
He was eventually ousted from Casino about two years ago in the culmination of a bitter fight for control. Naouri’s 51 per cent stake was wiped out in a debt restructuring under which Czech billionaire Daniel Křetínský took control of the retailer.
Casino is now facing the prospect of a second debt restructuring in little over two years, as slumping profits have raised the risk of a covenant breach on its debt.