Claude Bébéar, AXA’s founder and head of its advisory board, and its current CEO, Henri de Castries, were freed yesterday after each posted a 2 million franc ($258,000) bond. The two business leaders remain under investigation, however, in connection with a tax evasion probe involving former AXA subsidiaries, Luxembourg-based PanEuroLife and France’s Banque Worms. (See previous article)
The juge d’instruction, Dominique de Talancé, whose powers combine those of a district attorney and a magistrate, indicated that the two men had been placed under formal investigation, which is one step short of facing a formal indictment. Her ongoing investigation will eventually determine if either of the two will face criminal charges.
Reports concerning the investigation reveal that AXA was involved in the alleged tax evasion scheme through several former subsidiaries. It took over the operations of PanEuroLife when it acquired its parent company, French insurer UAP, in 1997. It also acquired another UAP subsidiary, Banque Worms.
As more details emerge, these two companies appear to be implicated in a scheme which involved wealthy individuals paying cash for life insurance policies. The funds – less than 50,000 francs ($6700) which could go unreported – were then deposited in Banque Worms, transferred to postal accounts, and eventually to Luxembourg. Policyholders could then cash in the face value of the policy, or turn it into an investment vehicle outside of France, taking advantage of Luxembourg’s bank secrecy laws. Reports put the amounts involved at between 750 million and 1 billion francs ($100 to $135 million).
While no one in France seriously considers the possibility that either Bébéar or de Castries actively participated in the scheme, they are in many instances responsible for the actions of corporate subordinates, under both civil and criminal law. The investigation is designed to assess how far culpability might reach, and is part of a general trend by the French judiciary in recent years to open high profile investigations of major business and government figures.
Topics AXA XL
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