The Wendell case: Ernst Antoine Selier, former head of MEDEF, attempted from Monday for massive tax fraud

The Wendell case: Ernst Antoine Selier, former head of MEDEF, attempted from Monday for massive tax fraud

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Ernest-Antoine Selier, 84-year-old former head of MEDEF, appears as of Monday with twelve other people before the 32nd Correctional Chamber of the Paris Court on charges of tax evasion. Those executives at the investment firm Wendel are accused, during a complicated financial arrangement, of recovering €315 million in shares “completely tax-free”.

They are suspected of knowingly participating in a financial arrangement aimed at defrauding tax authorities of huge sums: the former leaders of the investment firm Wendel, including the ex-president of Medef Ernest-Antoine Seillière, will be indicted from Monday in Paris.

Fifteen years after the events, fourteen people must appear for three weeks, first of all, Baron Celier, 84 years old, heir to the Wendell family, at that time Chairman of the Supervisory Board and Patron of European Presidents. Alongside him, Jean-Bernard Lafonta, 60, the then-chairman of the Executive Board, as well as eleven CEOs – former and current – and a former tax attorney will have to explain themselves at the helm of the 32nd Correctional Chamber. Sophisticated profit sharing plan software called Solfur.

315 million euros in stock recovered

At the end of May 2007, this clever scheme enabled fourteen officials (one of whom has since died) to recover 315 million euros in shares, or 4.6% of Wendel’s share capital, and this, according to the prosecution, “in complete exemption from taxation”.

For the National Financial Prosecutor’s Office (PNF), the gains made were then artificially placed, through corporate intervention, under a “tax suspended” system, with the goal of deferring or even eventually avoiding payment. Taxes on big capital gains. An explanation opposed by the defendants, who during the investigations refuted any intent to defraud, ensuring the assembly respected the law and administrative jurisprudence at the time.

Their lawyers, who did not want to speak before the trial, will demand their release. The trial is set to begin on Monday with a procedural battle over the legal issues raised by the defense.

Group founded in 1704

Simultaneously with a global reorganization, Operation Sulfur caused an uproar within Wendel, the former steel giant that became an investment company, still controlled by a family holding company with one thousand descendants of Jean Martin Wendel, the group’s founder in Lorraine in 1704.

In the months that followed, the difficulties of Saint-Gobain, in which Wendell invested, and especially the 2008 financial crisis, faltered the movement. Some executives considered themselves wronged, and took legal action, denouncing the eventual disastrous gathering.

In December 2010, just days before the tax law, everyone was notified of a major amendment: 240 million in total, fines included. In 2012, Percy brought to justice a series of criminal complaints for tax evasion, which led to a judicial investigation.

“Mozart Finance”

The investigations were based in particular on the exchange of emails about preparing the arrangement at the end of 2006 and the beginning of 2007, between Wendel directors, their teams of attorneys and JPMorgan Chase, in which the “tax risk” was carefully studied.

However, the US bank, which was initially put on trial in 2016 for complicity in tax evasion on the side of the defendants, will miss the court. In September, it agreed to pay a fine of €25 million via a court settlement to close the charges.

Jean-Bernard Lafonta, who had worked for Lazard Bank and BNP Bank, upon his arrival as group general manager in 2001 at the age of 40, as a “Mozart of Finance” finally submitted his resignation in 2009 in the wake of this. Case.

Defendants face up to five years in prison.

Sentenced for insider trading and dissemination of misinformation and then released on appeal, he must be tried from Monday on charges of tax evasion but also of complicity: principal beneficiary (€120m, before Mr. Celier, 79m), suspect after inciting executives to join to Sulfur.

During investigations, many of them claimed that they “had no other choice” but to accept the “parcel,” “turnkey,” after ascertaining “full legality and tax compliance.” While some have long been opposed to the tax reform, nearly all CEOs have finally agreed to a deal with the tax authorities.

A former tax attorney who was a member of the famous Debevoise & Plimpton, and who helped shape the fine lines of the arrangement, is also on trial for complicity in tax evasion. All bear a fine of 37,500 euros and five years in prison.

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