Wendel will appeal €1.5m St Gobain fine

City A.M. Reporter
FRENCH investment fund Wendel said it would appeal a €1.5m (£1.3m) fine from market watchdog AMF for insufficient disclosure over its stake-building in glassmaker Saint-Gobain in 2007.

The case centres on derivatives contracts with different banks which, according to the AMF, were market-sensitive and should have been disclosed by Wendel as the sole purpose was to prepare a stake purchase in Saint-Gobain.

Wendel said yesterday it was disappointed at the AMF ruling, adding it had complied with the law and regulations in force when it bought into Saint-Gobain’s capital. “We had been confident on this case. We are surprised,” a spokeswoman said.

The case was seen as important because of its similarity to French luxury goods group LVM’'s swoop on rival Hermes.

Both LVMH and Wendel used the same type of swap contracts and also spread their transactions across several banks. With each bank staying below the five per cent threshold, no disclosure was necessary.

However, AMF chief Jean-Pierre Jouyet said that the Wendel ruling did not prejudge the ongoing probe into the Hermes case.

“These are two separate cases, even if the principles of honesty and transparency are applicable to everyone,” Jouyet said. “We cannot...presume the conclusions of the (LVMH-Hermes) probe that will take at least nine months.”

The AMF said yesterday its sanctions committee had decided to fine both Wendel and former chairman Jean-Bernard Lafonta €1.5m each for not properly disclosing swap contracts and financing arrangements with banks, which it said were created purely for the purchase of a stake in Saint-Gobain.