Probe into Vivendi share buyback

French police have searched the offices of the country’s stock market regulator as part of a probe into an allegedly illegal shares buyback by Vivendi.

The French conglomerate is under investigation for illegally buying back its own stock in the aftermath of the September 11 attacks in America.

It is claimed the company, which has previously faced fraud charges in the US, wanted to maintain its share price.

Two executives from Deutsche Bank, who carried out the repurchases for Vivendi Universal, have also been questioned by French investigators.

The French Financial Markets Authority (FMA) has acknowledged that its president Michel Prada wrote to Mr Messier in the month after September 11 to say he did not intend to take any action against the company’s share buyback, despite it breaking French rules.

Yet this has not washed with APPAC, the small shareholder group that has accused the (FMA) of complicity, and had led the calls for an investigation.

Mr Messier was forced to leave his top job at Vivendi Universal in July 2002 after he ran up debts of $42bn after an over-ambitious spending spree.

He was then forced to give up a 21m euro ($26m; £15m) severance package which shareholders said was a reward for failure.

Mr Messier also reached a deal with the US Securities and Exchange Commission to settle a separate investigation into alleged financial irregularities at the firm.

The company has since returned to profitability – 131m euro ($157m; £91m) in the three months to September 2003 – after cost cutting and selling off its US entertainment arm.