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Liliane Bettencourt, the L’Oréal heiress, and her daughter, Françoise Bettencourt-Meyers, have declared a truce in the family feud that laid bare the secrets of one of France’s richest families and sparked a top-level political crisis.

Ms Bettencourt-Meyers announced she had withdrawn all legal action against François-Marie Banier, the society photographer whom she had accused of manipulating her 88-year-old mother. As a result, the daughter’s request to place her mother under court supervision – based on the state of her mental health – will also be dropped.

The battle between mother and daughter has gripped public attention since it burst onto the public scene earlier this year when memos and illicit recordings of private conversations involving the L’Oréal heiress were leaked. These appeared to raise questions over the relationship between money and politics, with suggestions of croneyism, political favours and even allegations concerning the funding of President Nicolas Sarkozy’s election campaign. The government denies any wrongdoing.

The deal struck on Monday will attempt to end any further public dispute. The details remain confidential but lawyers confirmed that Mrs Bettencourt’s son-in-law, Jean-Pierre Meyers, will take over as head of the investment vehicle, Téthys, that holds the family’s 31 per cent stake in L’Oréal, the global cosmetics group. Ms Bettencourt-Meyers’ children will also join the Téthys board. The move follows speculation in the press a few weeks ago that Ms Bettencourt had hoped to sideline her daughter’s husband.

In a statement issued on Monday, Ms Bettencourt said the arrangement “meets my wish to see the family united ... We can now embrace the future together, for the good of all of us and for L’Oréal, which is so much a part of my life.”

Olivier Metzner, lawyer to Ms Bettencourt-Meyers, said the decision to withdraw charges had been taken after his client had received “a certain number of promises” from Mr Banier. “Liliane and Françoise have been reunited and want to end all this polemic,” he said.

The news comes as a relief to L’Oréal, which has seen its corporate image tarnished by the very public domestic squabbles of its biggest shareholder, while the dispute has also raised questions over the continued independence of the cosmetics group. During the course of the dispute, Ms Bettencourt had suggested that her daughter could sell the family stake to Nestlé, which also holds 31 per cent of L’Oréal.

In a memo to employees, chief executive Jean-Paul Agon, said it was “a happy ending” that was “very positive” for the company.

But it will equally be welcomed by France’s governing elite, whose credibility has been badly damaged by allegations of political favours, secret donations and phone tapping that have been made in the course of the legal battle.

Eric Woerth, the former social affairs minister who was once a candidate to become President Nicolas Sarkozy’s prime minister, was dropped from the cabinet in a recent reshuffle. He is defending himself against allegations that as party treasurer he had used his influence to secure a job for his wife with Ms Bettencourt’s investment office. The investigation continues, and Mr Woerth denies the allegations.

Mr Sarkozy has also been accused by Le Monde, the respected left-leaning newspaper, of ordering the secret service to spy on its journalist reporting on the Bettencourt affair. The government denies it ordered the Le Monde probe, but the episode helped to depress the president’s popularity to record lows.

Copyright The Financial Times Limited 2017. All rights reserved.

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