THE ongoing legal battle between LVMH and Hermès has stepped up a gear - with LVMH filing another lawsuit against the French label. The luxury conglomerate filed charges on Tuesday against a civil manager at Hermès - in response to his comments made, which implied that LVMH had conducted "fraudulent" activity.
It's believed that the case concerns Patrick Thomas, CEO of Hermès International, who alleged that the company had obtained its controversial 22.6 per cent stake in the brand in a deceptive manner, during Hermès' annual meeting earlier this week. He accused the conglomerate of either acting "fraudulently" or being "so disorganised" for not knowing how it came to obtain its initial 17.1 per cent stake. "I'll let you decide," he concluded.
LVMH vice president, Pierre Godé, was quoted as confirming the new charges in French newspaper Le Figaro yesterday, saying that they had filed the suit "following what was said by the manager". WWD reports that he then added: "Hermès' campaigns are aimed to destabilise us. Our patience has its limits. It's time that the public learns the truth."
The news comes just days after France's regulation authority, the Autorité des Marchés Financiers (AMF), recommended that LVMH be fined €10 million (£8.5 million), over its stake in Hermès - the maximum charge given the timing of the gains. A final decision will be made by July 31.
The AMF accused the luxury company of concealing its gradual acquisition of Hermès, which now stands at 22.3 per cent, through cash-settled equity swaps dating back to 2001. LVMH did not announce news that it had a stake in the brand until October 21, 2010.
Hermès branded the acquistion "an attack" and feared an attempted takeover. LVMH strongly denies investing via questionable means. The case continues.
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