Jean Peyrelevade, the Chairman of French bank Credit Lyonnais, has indicated he will bring a libel action in a French Court against The Economist magazine over allegations that he was aware of irregularities involving the bank’s transactions concerning California’s Executive Life and its subsidiary Altus Finance.
Peyrelevade took over CL in 1993 following its near failure, due to incautious lending, over expansion and some questionable financial transactions. The article charged that he knew of the suspect of the Altus transactions, which are the subject of Federal and State investigations and several lawsuits, when he became head of the bank, but failed to disclose them until much later.
He has said that he wasn’t personally aware of any irregularities until 1998, and that when they were discovered CL duly reported them to regulatory authorities, and promised full cooperation in the investigations.
The charges, essentially that CL maintained a hidden stake in Altus after it was sold to companies controlled by French billionaire François Pinault and profited from the it, are serious enough to threaten the bank’s U.S. license, and are the subject of an investigation by U.S. bank regulators.
It’s unclear what effect, if any, Peyrelevade’s lawsuit would have on U.S. investigations, or legal proceedings. It raises the famous query of “what did he know, and when did he know it,” but any decision in France, where libel suits from aggrieved politicians, business leaders and other personalities are frequently used as a tactic to rebut damaging assertions, would probably not be given legal effect in the U.S.
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