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The prosecutor of the Paris high court, the Tribunal de Grande Instance, has launched an investigation into share buy-backs conducted by French media and telecoms group Vivendi Universal between September 2001 and April 2002.

The prosecutor asked two investigating magistrates to conduct the inquiry at the end of last June after a report from the French markets regulator, the Autorité des Marchés Financiers (AMF), into alleged breaches of stock market rules by Vivendi.

The high court inquiry centres upon whether Vivendi issued false or misleading information about its situation, the FT’s sister paper Les Echos has learnt.

In September 2001, in the wake of the New York terror attacks, the forerunner to the AMF, the Commission des opérations de Bourse, authorised Paris-listed companies to conduct exceptional share buy-backs during 14 days to support their shares in a falling market.

But according to the AMF report, Vivendi, chaired at that time by Jean-Marie Messier, continued to intervene in the market for its own shares after the AMF’s 25 September cut-off date.

The group dealt in its own shares during the first quarter of 2002, despite having announced, on 17 December 2001, plans to buy the entertainment assets of USA Networks. It said the purchases would help the deal, completed in May 2002.

At the time, French market rules stopped payment for acquisitions in bought-back shares if the issuer had intervened in the market in the previous three months.

The AMF says Vivendi failed to make required disclosures on 7 January 2002, when Deutsche Bank and Goldman Sachs sold its stock, and on 30 January. Besides Vivendi, the AMF says intermediaries Wargny and Natexis, which acted for Vivendi, could be criticised for breaching market rules.

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