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Monday, May 27, 2024

Europe’s richest man investigated over ‘Russian ties’

Bernard Arnault’s lawyer argued that the CEO of LVMH is too respectable to engage in petty money laundering

French luxury goods magnate Bernard Arnault is being probed over a suspicious financial transaction involving a Russian businessman Nikolai Sarkisov, according to the Paris public prosecutor’s office.

The case was brought to light by the French newspaper Len Monde, which reported earlier last week, citing a December 2022 document from France’s Tracfin financial intelligence unit, that Sarkisov acquired real estate at the Alpine ski resort of Courchevel in 2018 via a complex transition in which Arnault allegedly had provided a loan through one of his companies.

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The prosecutors did not disclose the target of the preliminary investigation but confirmed that potentially suspicious financial transactions between Arnault and Sarkisov had been added to the inquiry after the office received an alert from Tracfin.

“A preliminary investigation has been underway since 2022, and… the Tracfin report drawing the attention of the prosecution to operations concerning Mr. Bernard Arnault and Mr. Sarkisov, likely to characterize acts of money laundering, was attached to this procedure,” the Paris prosecutor’s office said in a statement.

Bernard Arnault controls French luxury group LVMH, the parent company of such brands as Louis Vuitton, Christian Dior, Bulgari, Moët, Hennessy and many other, while the billionaire’s personal fortune fluctuates and he is considered to be the wealthiest or second richest man in the world, depending on the day. His lawyer, Jacqueline Laffont, called the allegations “as absurd as they are baseless.”

“Who can seriously imagine that Mr. Bernard Arnault, who for the past 40 years has built France and Europe’s top companies, would engage in money laundering to expand a hotel? I think that the senseless nature of these allegations cannot escape anyone,” Laffont said in a statement to Reuters.

Nikolai Sarkisov, who co-owns an insurance company Reso-Garantiya with his brother, also denied the allegations. Reso-Garantia Deputy CEO Igor Ivanov, told CNBC in an email that neither the company, nor Sarkisov personally, had been involved in the transaction, and that the French investigators made no requests for any documents from the company.

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“Mr Sarkisov and Mr Arnault have never met,” Ivanov stated, adding that “all transactions were carried out by French companies, through French notaries by French lawyers on all sides. This was a usual real estate deal.”

In France, a preliminary investigation does not necessarily imply wrongdoing as the presumption of innocence applies.