(Adds CDC comment, background, details)
By Matthieu Protard and Benjamin Mallet
PARIS, March 13 Veolia board members
representing its top three shareholders and more than 20 percent
of its stock abstained from the vote to re-elect Chief Executive
Antoine Frerot in February, officials from two of the three told
Reuters on Thursday.
Representatives of the government's CDC holding fund, with
8.85 percent, the Dassault family holding company with 5.99
percent, and institutional investor Groupama with 5.20 percent
all decided not to back Frerot in the Feb. 25 vote of the
16-member board which returned him to power, said Henri
Emmanuelli, chairman of the CDC's supervisory council.
Frerot himself has characterised the events that led up to
his re-election as an attempted boardroom coup, naming Dassault
as one of the rebels.
Thursday's direct confirmation of the rebellion from
Emmanuelli and Groupe Dassault CEO Charles Edelstenne confirms
the scale of opposition he faces and the fact that the
government body was among the rebels.
"To my knowledge neither the CDC nor the two other main
shareholders, Groupama and Groupe Dassault, took part in the
reinstatement of Mr. Frerot," said Emmanuelli.
Earlier on Thursday, Edelstenne went further, confirming
Dassault's initial support for a different candidate.
Edelstenne did not give a name, but his comments come after
news of an attempt to put senior government official David Azema
in Frerot's place kicked off the saga a month ago in a newspaper
Groupama had no immediate comment.
Azema backed away from being a formal candidate in an
interview with Reuters on Feb. 25. Frerot was subsequently
re-elected the same day.
Frerot himself confirmed the shareholder rebellion in a
March 3 television interview in which he named Dassault as one
of the rebels.
Sources familiar with the world's biggest environmental
services group have said some shareholders are unhappy with the
pace of restructuring at Veolia, whose stock is down some 40
percent since Dassault bought its stake in 2008.
The failed coup comes about two years after a similar
challenge led by state-controlled utility EDF, which at
the time had a 4 percent Veolia stake and whose CEO, Henri
Proglio, is the former head of Veolia and one-time mentor of
A source in the Frerot camp told Reuters last month that the
leadership challenge partly reflected a desire for more drastic
staff cuts to restore profitability and boost the stock price.
Veolia is set to cut a total of 1,600 jobs in its French
water business, of which 900 would occur through natural
attrition - 500 in 2013 and 400 this year - and 700 through
redundancies. It will also reassign 500 outsourced jobs to
These cuts have been agreed with the unions and Frerot has
said that to cut more jobs would be counterproductive. Some
other institutional shareholders have said they support Frerot's
(Additional reporting by Cyril Altmeyer; Writing by Andrew
Callus; Editing by James Regan)