Future of France Telecom CEO Is Open To Question -Minister

    By Ruth Bender 
 

PARIS--The future of France Telecom's (FTE) chief executive is open to question after French authorities on Wednesday placed Stephane Richard under formal investigation for his alleged role in an arbitration ruling that gave a financial award to a prominent French businessman five years ago, France's technology Minister Fleur Pellerin said Thursday.

"The question is being asked," Mrs Pellerin told French radio RTL in response to a question whether Mr. Richard will continue to stay at the head of France Telecom. The group's board will have to come up with an answer to that question at its meeting in the coming days, she added.

Mrs Pellerin said the board hadn't yet taken a decision about Mr Richard's future at France Telecom, which is 27%-owned by the French state.

"We are discussing it," she said, adding that the group's board will meet "at the beginning of next week."

Prosecutors Wednesday said in a statement that investigating magistrates have pressed preliminary charges of conspiracy to commit fraud against Mr. Richard for his alleged actions surrounding the arbitration panel and its decision to grant a 420 million-euro ($559 million) award from the French Treasury to business tycoon Bernard Tapie. Mr. Richard was a senior official at the French Finance Ministry at the time of the decision.

Mr. Richard plans to appeal the move to put him under formal investigation, his lawyer, Jean-Etienne Giamarchi, said Wednesday. Mr. Giamarchi said the charges "have no serious legal basis," adding that they are "grotesque and defamatory."

French Finance Minister Pierre Moscovici in a statement late Wednesday said that company's board will have to meet as soon as possible to assess the situation.

-Write to Ruth Bender at [e-mail]

Sam Schechner contributed to this report

Subscribe to WSJ: http://online.wsj.com?mod=djnwires