LVMH CEO and CEO of French luxury group under investigation

LVMH CEO and CEO of French luxury group under investigation

The world's second-richest man and CEO of LVMH-one of Europe's most valuable companies-is under investigation over financial transactions linked to Russia's oligarch Nikolai Sarkisov.

The investigation into the case was first opened in 2022, the prosecutors' office said. The news of it was made public last week when French outlet Le Monde reported that authorities were questioning Sarkisov's purchase of a ski resort in the French Alps using a loan from Arnault. The report cites Tracfin, a French economy ministry's anti-money laundering unit, which flagged the transaction as a suspicious financial transaction.

The start of the investigation doesn't imply guilt for the parties involved, and no one has been charged yet.

Le Monde cites an unidentified associate of Arnault, who said the deal was carried out within France's legal limits.

With his brother, Sarkisov, Sarkisov owns the Russian insurance company RESO-Garantia. Russia-based company is a well-known insurance provider in the nation, offering a wide range of insurance policies for individuals and legal entities.

RESO-Garantia's spokeswoman told The New York Times that Sarkisov had neither met nor was involved in the transaction under investigation.

RESO-Garantia spokeswoman Igor Ivanov said that some of those properties were based in Courchevel, where Sarkisov's ski resort is located.

RESO-Garantia has also been under investigation by French authorities for a different case that involved former French President Nicolas Sarkozy, who was hired as an advisor by the group for about $3 million.

The Prosecutor's office could not comment on the ongoing investigation. In a statement, Tracfin said he did not immediately return a request for comment.

LVMH, a French company that owns luxury brands such as Louis Vuitton and Christian Dior, is among Europe's biggest companies by market capitalization. Arnault's net worth, based on the Bloomberg Billionaire Index, is $167 billion. The company made a net profit of €42.2 billion in the first half of 2023, up 15% from the same period last year. The company has quickly become one of the world's most important luxury firms, which has also brought it under scrutiny in some cases.

Arnault lost a case to French tax investigators earlier this year about a raid in 2019 on the headquarters of LVMH in Belgium. The company said it was likely that any tax discrepancy was likely a 'procedural issue' under European law and its activities were known to French authorities.