Orange Chief sentenced to one year in prison

Orange CEO Stéphane Richard was given a one-year suspended prison sentence by a French appeals court in a fraud case centered on deceased businessman Bernard Tapie, leaving his future in the company of telecommunications at stake.

Richard, who had been at the head of Orange since 2011, had already been acquitted in this long-standing case, which concerns a post he once held in the government as chief of staff to Christine Lagarde, then finance minister.

Prosecutors had requested a three-year sentence against Richard. He was acquitted of one count of fraud, according to Wednesday’s court decision, but found guilty of complicity in the embezzlement of public funds, sentenced to a suspended sentence and a fine of € 50,000.

Orange, France’s largest telecommunications group, declined to comment on the case, which is unrelated to the company. But Orange’s board was due to meet later Wednesday to discuss Richard’s position and whether he could continue, people familiar with the matter said.

The French state has a minority stake in Orange, and Finance Minister Bruno Le Maire has previously said top executives of government-backed companies should leave if convicted of a crime.

The case centers on a payment of 403 million euros given by the government to Tapie, who accused the state of defrauding him under a trade deal nearly three decades ago, when he sold a stake in sportswear group Adidas to a public bank.

The settlement had been approved by Lagarde, who was then working alongside Richard, but the payment was later criticized as excessive amid accusations that it was a secret reward for Tapie’s support of the former president Nicolas Sarkozy during his election campaign.

Tapie, known in France as the former president of the Olympique de Marseille football club, died in October. Lagarde, now head of the European Central Bank, was convicted in 2016 of negligence in the performance of public office.

Richard has long denied wrongdoing and said he rejects all charges against him and will appeal the verdict to a higher court. He added that his mandate at Orange was “in the hands of the board of directors of Orange”.

Orange has two “delegate” heads who could intervene if Richard were replaced – Gervais Pellissier, who has held management positions at Orange since 2005 and deputy director since 2009, and Ramon Fernandez, a former government adviser, who has been deputy. chef since 2014.

Since he was at the top, Richard has been a spearhead at Orange, recovering from a crisis sparked by a wave of suicides of staff members when he took over. His appointment coincided with a tumultuous period in French telecoms following the rise of aggressive competitors like Altice, which acquired SFR and Numericable, and Iliad from Xavier Niel.

Orange, one of Europe’s largest telecommunications companies alongside Deutsche Telekom and Vodafone, has tried to revive its growth with overseas acquisitions and forays into different sectors including media and banking. More recently, it has focused on creating value by separating its tower activities into a new company called Totem and pursuing agreements in certain markets to strengthen its bases there, notably Romania and Belgium.

Richard’s tenure, however, was overshadowed by Tapie’s allegations. He had previously argued that his impeachment would destabilize the company, including in 2018 when the French government backed him for a new term despite the prospect of a trial for damaging fraud.

Additional reporting by Domitille Alain in Paris

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