Orange CEO to be judged by admin court in Tapie case-sources

PARIS Wed Nov 27, 2013 9:39am EST

PARIS Nov 27 (Reuters) - Orange Chief Executive Stephane Richard faces a ruling in a French administrative court for his role as a government aide in a 2008 arbitration case in which the state awarded a large pay-out to businessman Bernard Tapie, sources with direct knowledge of the matter told Reuters.

Richard, who is being investigated in a separate criminal case on the affair, will be questioned in January or February by France's Court of Budgetary and Financial Discipline (CBFD), said the sources, who requested anonymity.

The hearing comes at a sensitive time for Richard, who is expected to seek a second term at the head of Orange, one of France's biggest state-backed companies.

Richard, who at the time of the arbitration was a senior Finance Ministry official, has repeatedly denied wrongdoing.

A prosecutor for the CBFD, which is charged with ensuring the proper use of public funds by state employees and can levy fines, decided on Nov. 20 there was sufficient evidence for Richard and two other public servants to go before the court, the sources said.

A ruling is expected a few weeks after testimony is heard.

The government of President Francois Hollande will have to decide whether to renew Richard, who took the helm in early 2010, sometime before the group's annual shareholder meeting due in May. The state owns 28.4 percent of Orange, Europe's fourth-biggest telecom operator by sales.

Richard was a top aide to former Finance Minister Christine Lagarde in 2008 when the government of the day awarded Tapie 285 million euros ($373 million) in damages in a long battle with now-defunct bank Credit Lyonnais.

Tapie, a supporter of former President Nicolas Sarkozy, had contested the bank's role in the sale of his stake in sports clothing firm Adidas in 1993.

In the separate criminal case, investigating judges are examining allegations that Tapie got favourable treatment because of his political ties when the government decided to take the case to arbitration instead of court.

In June, Richard was placed under formal investigation in the criminal case for fraud, raising questions as to whether he could continue to lead Orange.

In French criminal law, a formal investigation means there is "serious or consistent evidence" pointing to likely implication of a suspect in a crime. It is one step closer to a trial, but some such investigations have been dropped without going to court.

The same presumption of innocence exists in the CBFD administrative court, which has not yet ruled that Richard committed wrongdoing. (Reporting by Jean-Baptiste Vey; Writing by Leila Abboud; Editing by Mark John)