One of the worst media-merger flops of the last decade is coming back to haunt Edgar Bronfman Jr. and French entrepreneur Jean-Marie Messier in a widening scandal of alleged stock rigging and insider trading over their deal.
French authorities yesterday ordered that Messier, Bronfman and five others face a criminal trial over alleged irregularities stemming from their 2000 merger of Seagram and Vivendi to create media giant Vivendi Universal.
A probe has been underway for five years as a result of a shareholder lawsuit claiming that Vivendi's stock had been manipulated and that company funds were wrongly diverted for other purposes.
The criminal trial order came as a surprise because the prosecutor in the case earlier this year recommended to a French magistrate that the criminal case be dropped due to "weak" evidence.
French legal experts said it wasn't unusual for a magistrate to overrule a prosecutor in such high-profile cases and send such cases to court in order to quell any public outcries of favoritism.
Bronfman, 54, now chairman and CEO of Warner Music Group, was accused of criminal insider trading, selling Vivendi shares he owned ahead of the public. His lawyers said he was innocent, that he wasn't a Vivendi executive at the time he had the information and that he sold his shares in the stock rout after the 9/11 terrorist attacks.
Insiders said that Bronfman always had little enthusiasm for Messier, who forced him out of upper management in 2001.
Messier, 53, now an investment adviser, was ousted by Vivendi Universal's board in 2002 for accounting irregularities.
