The head of Kohlberg Kravis Roberts’ Paris operations has been in talks with French regulators and representatives of other private equity groups in the country over concerns of market manipulation involving false takeover rumours.
The Autorité des Marchés Financiers, France’s stock market regulator, has confirmed talks with investment funds about ways to stem a wave of ill-founded market rumours that have prompted sharp share movements.
Other investment funds have become so concerned at the rumours that they have sought meetings with the watchdog.
The moves come as the buy-out industry faces unprecedented levels of scrutiny from governments, tax authorities and regulators.
The UK’s Financial Services Authority this month warned of the potential risks of excessive leverage and market abuse in the private equity industry, while the US Department of Justice is investigating potential anti-competitive behaviour among certain US houses.
Jacques Garaïalde, head of KKR’s French office, and Patrick Sayer, chairman of France’s private equity trade body who is also chief executive of Eurazeo, the French private equity group, met the regulator last week at their own request.
The US buy-out group expressed concerns about unfounded rumours relating to potential deals with which the KKR name had been linked in French newspapers.
KKR, which declined to comment, is concerned about the risk of market abuse with people potentially profiting from share trading in companies with which its name has been falsely connected. This could damage its reputation despite its not being involved in any illegal trading.