A new investigative report reveals some juicy new details on the methods through which LVMH came into its 22.6% stake in Hermes. And those details don’t exactly support Bernard Arnault’s recent claims that LVMH came into those shares “unexpectedly.”
While a court battle is brewing between the two luxury houses, French newspaper Le Monde leaked details from a 115-page criminal investigative report on LVMH compiled by French market authority AMF.
According to the report (via WWD), LVMH began building its stake in Hermes back in 2001 through subsidiaries. They even used a code name–”Mercure”–to refer to the investment operation. In 2007, LVMH continued investing in amounts low enough that it didn’t have to disclose those investments publicly.
LVMH said Saturday that it will “vigorously” defend itself against the allegations found in the report, which it claims was procured in “illicit” ways.
Meanwhile, LVMH is also defending itself against a lawsuit filed by Hermes alleging insider trading and manipulating stock prices. LVMH is countersuing Hermes for “blackmail, false accusations and unfair competition.”
Clearly, LVMH is doing everything it can to save face. But if AMF’s findings, which will be presented on May 31 to AMF’s sanctions committee, are found to be true, there will only be so much the luxury conglomerate can say.