“The news just keeps getting worse for media giant Vivendi Universal SA, which has been struggling to relieve massive debt accrued during a buying spree over the past two years: The company announced yesterday that it is under investigation by the Justice Department and the Securities and Exchange Commission.
In July, French officials raided the company’s Paris headquarters, seizing documents and taking computer files from the office of the chief financial officer. That followed the July ouster of Jean-Marie Messier, the company’s flamboyant chief executive, who had sought to convert the creaky French utility into a 21st-century media company via a series of rapid and costly acquisitions.
The French and U.S. probes will presumably seek to determine if Messier’s activities crossed the line from profligate into criminal.
The SEC investigators have been following the French probe, which is looking into the company’s executive accountability rather than its accounting practices. “It’s a case of what did you know and when did you know it, and who did you say it to?” the source said.
Messier was replaced in July by Jean-Rene Fourtou. The French businessman immediately secured more than $2 billion in loans to meet payroll, then vowed to sell $12 billion in assets over the next two years to eliminate debt. Last week, Vivendi Universal announced that it will sell its Houghton Mifflin Co. publishing unit to a consortium of buyers for $1.72 billion, less than the $2.2 billion Messier paid for it last year.”
