Mr. Richard’s grip on the job became uncertain last week after he was placed under formal investigation in connection with what was suspected to be fraud involving a 2008 arbitration case. But in a statement Monday, the board of the company, which is changing its name to Orange, expressed “its full confidence in Stéphane Richard and his ability to effectively meet the numerous challenges facing” the company. “In particular, the board considers that the legal measures affecting Stéphane Richard do not impede his ability to fully and effectively lead Orange as its chairman and chief executive officer.”
The statement said the board had also asked an independent board member, Bernard Dufau, “to follow the situation.”
With its 27 percent stake in France Télécom, the government appoints three of the 15 directors on the board, and its vote tends to be decisive.
Mr. Richard’s continued stewardship at France Télécom, at least for the short term, was essentially secured on Sunday when Mr. Hollande told the M6 television network that the executive had the state’s support, as long as the investigation did not stop him from performing his functions at the company.
“If the judicial procedure takes a turn such that he can no longer lead the enterprise, at that moment another decision will be taken,” Mr. Hollande added.
The company employs about 170,000 people worldwide. Mr. Richard has been chief executive since February 2010 and is credited with helping to restore stability after a major restructuring led by his predecessor caused morale to plunge. Company unions last week called for Mr. Richard to stay on despite the investigation.
Mr. Richard denies any wrongdoing, and a formal investigation does not necessarily lead to charges or trial.
In 2008, he was a top aide to Christine Lagarde, the French finance minister at the time, when a businessman named Bernard Tapie was awarded 403 million euros, or about $538 million, by an arbitration panel to settle a commercial dispute with Crédit Lyonnais, a state-owned bank. Mr. Tapie had been a lifelong Socialist, but he changed parties to support the 2007 election bid of former President Nicolas Sarkozy. Investigators are seeking to find out if Mr. Tapie might have received special treatment, and the state has begun working to overturn the award.
Ms. Lagarde, currently head of the International Monetary Fund, is also being investigated in the case as an assisted witness, a less serious status than formal investigation. She also denies any wrongdoing.
Investors appeared to support Mr. Richard’s expected retention, with shares of France Télécom ending 3.1 percent higher in Paris.
Article source: http://www.nytimes.com/2013/06/18/business/global/france-telecom-expected-to-back-chief-executive.html?partner=rss&emc=rss
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