Orange CEO Must Quit If Convicted in Trial, French Official Says
(Bloomberg) -- Orange SA Chief Executive Officer Stephane Richard will have to resign if he’s convicted next week on decade-old allegations of fraud, a top finance ministry official said.
A Paris court will decide on July 9 whether Richard helped businessman Bernard Tapie cheat the government out of about 403 million euros ($455 million) in 2008, when he was chief of staff to then Finance Minister Christine Lagarde. He faces as much as 18 months in prison.
Finance Minister Bruno Le Maire said last year that Richard must step down if convicted. The French official confirmed this policy on Saturday in a briefing with reporters at a conference in Aix-en-Provence, in southern France, asking not to be named.
Richard has seen Orange through a competitive assault by a low-cost challenger and a bruising price war during his nine-year tenure. The 57-year-old executive is also credited with calming labor unrest following a wave of employee suicides. Orange shares have risen 22% in the past five years while the wider European sector declined, with the Stoxx 600 telecommunications index falling 19%.
The trial has been a distraction for the company, which faces a slowdown in earnings growth this year as it gears up to spend billions of euros on faster 5G wireless networks. The board decided not to appoint an interim CEO during the trial, saying in December that deputy CEOs Ramon Fernandez and Gervais Pellissier had the “same powers” as their boss.
Richard’s lawyer has called the accusations against his client baseless and said he was eager to clear his name. A spokesman for Richard declined to comment ahead of Tuesday’s ruling.
The French state and publicly funded bank Bpifrance Participations own around 23% of Orange. The CEO told BFM TV in May he would appeal a guilty verdict, but wouldn’t fight to keep his job.
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