LVMH has been ordered to pay a fine of €8 million (£6.8 million), by France’s stock market regulator, AMF, over the controversial acquisition of its stake in Hermès – the highest fine it has ever imposed. It was first recommended that the maximum fine be given last month, but the final decision was announced last night.
The luxury conglomerate, helmed by Bernard Arnault, has already made clear that it plans to appeal the decision. "The very principle of the sanction and, even more so, the amount of the fine are completely unjustified in this case." No comment has yet been made from Hermes.
According to reports, AMF announced its decision on June 25, but only made the information public on July 1. The committee found that LVMH was guilty of "failing to inform the market that it was preparing to raise its stake in Hermes and of having breached its disclosure requirements when publishing its consolidated financial statements for 2008 and 2009".
LVMH and Hermès have been embroiled in an on-going legal battle since LVMH first announced that it had a stake in the brand in October 2010. The luxury conglomerate was accused of concealing its gradual acquisition of Hermès International holdings – which now stands at 22.3 per cent – through cash-settled equity swaps dating back to 2001.
LVMH strongly denied investing via questionable means, arguing that the company did not slowly and secretively accrue shares. The luxury firm’s lawyer, Georges Terrier, and vice president Pierre Godé called for the case to be annulled, saying that it was impossible for the committee to come to an unbiased decision based on Hermès’ recent "damning media campaign" against the company.