France Telecom Orange’s board of directors has decided to keep Stephane Richard as CEO, who is currently under investigation in a fraud case.
After a meeting yesterday the board noted in a statement that “the legal measures affecting Stephane…
France Telecom Orange’s board of directors has decided to keep Stephane Richard as CEO, who is currently under investigation in a fraud case.
After a meeting yesterday the board noted in a statement that “the legal measures affecting Stephane Richard do not impede his ability to fully and effectively lead Orange as its chairman and CEO.”
French president Francois Hollande had said the day before that the state, which has a 27% stake in the company and is represented on its board, would vote to keep Richard at the helm of Orange.
He said in an interview on French television that the decision was “in the best interest” of the company, which has been facing several challenges including the launch of low-cost operator Free Mobile last year and a series of employee suicides between 2008 and 2009.
A question mark was placed over Richard’s future at the head of the company last week after it was revealed that he was under formal investigation.
The ongoing investigation relates to an arbitration case between businessman Bernard Tapie and the Credit Lyonnais bank in 2008. Richard was a close aide to former finance minister Christine Lagarde when the then-government decided to opt for an arbitration, which eventually saw Tapie being awarded €403m (US$537m) in damages.
Richard has denied any wrongdoing and his lawyer has reportedly appealed the decision regarding the placement under formal investigation.
The French incumbent stated yesterday that it has full confidence in the CEO’s ability to “effectively meet the numerous challenges facing Orange with the same energy as ever in the best interests of the company, its employees, its customers and its shareholders.”
Orange however said that it has appointed Bernard Dufau, independent board member, to ensure that the case will not prevent Richard from leading the company.
Yesterday, Orange shares closed at €7.59, up 3% compared to Friday last week.
