By Michel Rose
PARIS, June 16 France Telecom chief
executive Stephane Richard has state backing to stay in his post
as long as an inquiry into fraud allegations does not prevent
him from working, President Francois Hollande said on Sunday.
Richard was a top aide in the finance ministry under former
president Nicolas Sarkozy when his government in 2008 awarded
tycoon Bernard Tapie 285 million euros ($373 million) in damages
in a legal dispute with defunct bank Credit Lyonnais.
Richard's future has been in doubt since magistrates last
week said they were opening a formal investigation into his role
in the award. It is due to be discussed at an executive board
meeting set for 3:30 pm Paris time (1330 GMT) on Monday.
"He can stay as long as the judicial procedure allows him to
remain at the helm of the company," Hollande told M6 television.
Europe's fourth-largest telecom group is 27 percent owned by
the state. While its executive board has 15 members in total,
sources familiar with the company's governance told Reuters last
week the stance of the three state representatives on the board
was likely to be decisive.
Tapie, a supporter of Sarkozy, had contested the bank's role
in the 1993 sale of his stake in sports firm Adidas
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
Richard has denied any wrongdoing. IMF chief Christine
Lagarde, who was finance minister and Richard's boss at the
time, has the status of special witness in the investigation.
Under French law, formal investigation means there exists
"serious or consistent evidence" pointing to likely implication
of a suspect in a crime. It is one step closer to a trial, but a
number of such investigations have been dropped without trial.
A number of other captains of French industry have pursued
their jobs while under formal investigation, but commentators
have pointed out that Richard's case is notable in that the
state has a sizeable minority holding in his company, and that
the case relates to allegations over the misuse of public funds.
A spokeswoman for France Telecom declined to comment.
French media reported on Sunday that Richard could count on
votes of all three board members representing the state, as well
as those of at least four other board members.
Hollande's Socialist government decided to vote in favour of
Richard because he enjoyed support from labour groups and
because the judicial procedure did not prevent him from
travelling abroad, Le Monde said, citing unnamed sources.