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PARIS, Nov 29 (Reuters) - The head of Veolia's French water unit will leave the firm following a breach of ethics rules, over which the company has launched an internal audit and filed charges, its chief executive wrote in a letter to staff.
Antoine Frerot said in the letter - seen by Reuters - that Alain Franchi will leave on Dec. 31 and be replaced by Frederic Van Heems, the current head of Veolia's Italian business.
Veolia had previously said last week that it had suspended two managers in its French water unit and launched an internal audit following a media report about a possible conflict of interest in a customer payments scheme.
Alain Franchi is not one of those two managers. According to a source close to the company, Franchi's contract was set to end this year and there is no indication that he was involved in any suspicious transactions.
French investigative website Mediapart reported that two Veolia managers had become shareholders of Luxembourg-based company Olky Payment shortly after awarding it, at the end of 2014, a contract to manage Veolia's French water customer bills.
A Veolia spokesman has confirmed that Olky Payment has a contract with the company to manage unpaid customer bills.
Frerot said in his letter that he had been made aware of behaviours that could be in breach of ethics rules at Veolia and that the company had launched an internal audit.
He added that a dismissal procedure had been started against the two employees who had been suspended.
The water and waste utility has also filed a complaint against an unknown person with the police, a procedure that allows prosecutors to open a judicial investigation.
Veolia shares were down 0.8 percent and are down by around 26 percent since the start of 2016. (Reporting by Benjamin Mallet; Writing by Geert De Clercq; Editing by Sudip Kar-Gupta)