Former Vivendi CEO admits in court to errors

* Messier pleads not guilty but admits errors

* Risks up to five years prison, 375,000 euros fine

By Thierry Leveque

PARIS, June 2 (Reuters) - Jean-Marie Messier, the emblematic entrepreneur who created media group Vivendi (VIV.PA) out of a water firm through a spate of leveraged acquisitions that nearly choked the company, admitted in court he had made strategic errors.

The 53-year old Frenchman, ousted from Vivendi in 2002, is standing trial, accused of giving out misleading information, manipulated stock prices and misappropriated company funds between 2000 and 2002, when the group bought Universal Studios, USA Networks and other telecom assets.

If convicted, he could face a sentence of up to five years in jail and as much as a 375,000 euros fine.

On the first day of his trial, which is set to last three weeks, Messier said his idea to create a global group based on the expected convergence between communication channels and content had been good but premature.

"Did we make errors? Yes. As chairman I take responsibility for that, especially a lack in foresight," he said, but he also blamed financial analysts for the buzz around the merger activities under his stewardship as he turned the Generale des Eaux water and waste treatment conglomerate between 1996 and 2002 into a $51 billion global media empire at its high point.

Vivendi shares traded at 138 euros in the first quarter of 2000 and fell to below 10 euros in the first half of 2002.

"There has been a lot of talk about my ... communication. It had gone from a stage of excess to one of provocation ... You can be proud without being arrogant. At that time, I gave an image of arrogance and not of pride," Messier told the court, at times his voice breaking with emotion.

CLASH OF CLANS

Messier said the board of directors did not function well.

"One of the failures, in relation to the ambitions that we could have had, was that the events turned the board meetings into a clash of clans," he said.

The man who once branded himself "J6M," for "Jean-Marie Messier me myself master of the world" in French, told the court he has a monthly income of 25,000 euros from his consulting company where he employs 20 people.

The plaintiffs, small investors who are asking for combined 10 million euros in compensation, called the court case a model trial.

"Directors of listed companies have duties and obligations towards us -- to tell us the truth, all the truth and nothing but the truth, even if it is not pleasant to hear," Didier Cornardeau, chairman of the APPAC shareholders lobby told reporters at the court.

Messier was ousted in 2002 after the finances of the group deteriorated heavily. His successor has sold off assets in a restructuring deal and the firm is profitable again.

Vivendi is a co-plaintiff and its lawyers can ask questions.

Messier stands accused of having tried to hide the pending catastrophe in the company's communications, of influencing the stock price by a massive buy-back of shares in the aftermath of the Sept. 11, 2001, attacks to stem a steep share slide, and of having put in place a golden parachute of 20 million euros.

Four other former executives are also standing trial -- including ex-chief financial officer Guillaume Hannezo -- as well as two other people, including Canadian billionaire Edgard Bronfman, the chief executive of Warner Music group who was deputy chairman of the board of directors at Vivendi.

All are pleading not guilty.

If found guilty, they are unlikely to face actual imprisonment but could get suspended sentences, a kind of probation under French law. The court can also order them to compensate shareholders hurt by any fraud.

The French criminal case is separate from a U.S. class action lawsuit also under way. A U.S. jury in January found Vivendi -- but not former executives Messier and Hannezo -- liable for misleading investors about its financial condition from October 2000 to August 2002. The company is appealing the ruling. (Additional reporting by Leila Abboud; writing by Marcel Michelson; editing by Karen Foster)