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Vivendi under criminal investigation in the US

Vivendi under criminal investigation in the US

Vivendi Universal is under criminal investigation in the US on top of an inquiry by the US Securities and Exchange Commission, the French conglomerate said yesterday.

The Paris company, which already has French authorities scrutinising its bookkeeping and shareholders in revolt to deal with, will cooperate fully with the "preliminary criminal investigation" launched by the US Attorney's office for the Southern District of New York, it said in a statement.

The US Securities and Exchange Commission (SEC), which is conducting an informal inquiry into Vivendi Universal, will coordinate its activities with the US Attorney's investigation, Vivendi Universal said. The company earlier this year was accused of employing tricky accounting methods to increase profits in 2001, though it is not clear if this is the focus of the SEC and criminal probes.

Nobody at Vivendi Universal was immediately available to comment on the US inquiries.

Vivendi Universal also has been sued by shareholders in both France and the US. The suits allege the company issued misleading financial information while it was headed by Jean-Marie Messier. French authorities have launched an inquiry as well, according to media reports.

Jean-Marie Messier, who was chairman and chief executive officer, was replaced by Jean-René Fourtou in July.

Vivendi Universal piled up billions of euros in debt as it grew from a utilities company to a conglomerate active in media, Internet and telecommunications, among other areas. The company in August reported a net loss for the first half of 2002 of €12.3 billion ($21.9 billion) as of June 30, the last day of the period being reported.) Debt according to French accounting rules was about €35 billion as of June 30, the company said.

Vivendi Universal has announced a restructuring plan, as part of which it is seeking to sell €12 billion worth of assets over 18 months. The company estimates that it will have sold assets worth more than €5 billion by the end of the year.

Shares of Vivendi Universal were up 4.8 percent at €12.89 in midday trading at the Paris stock exchange, far from the 52-week high of €64.40.


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