Stephane Richard, CEO of France Telecom, is under increasing pressure in his role after being put under formal investigation for his part in an arbitration case prior to his appointment at the international operator group.
According to Reuters, Fleur Pellerin, France’s Digital Economy Minister, had said there are question marks over Richard’s position at the operator, describing the issue as an “open question”.
Bloomberg said that the board of France Telecom will meet next week to discuss the issue, although the operator also said that Richard will be back at his desk before that.
The formal investigation was opened late yesterday, and follows several days of questioning. Richard’s lawyer said an appeal is planned.
Reuters said that, under French law, when a person is put under investigation it is “a step closer to trial”, but such enquires can also be dropped without further action.
While the issue does not involve Richard’s activities at the helm of France Telecom, Bloomberg said it is still a “distraction” from running the business.
Richard was previously chief of staff for Christine Lagarde, the former Finance Minster of France.
According to Reuters, when the country was under the leadership of president Nicolas Sarkozy, it initiated an arbitration case between businessman Bernard Tapie and now defunct bank Credit Lyonnais, relating to the sale of his stake in Adidas.
This led to a payout of around €400 million to Tapie, a supporter of Sarkozy.
Earlier this year, it was reported that the French government, which owns 27 per cent of France Telecom, was considering replacing Richard as part of a shake-up at its state-affiliated industries.
The mooted replacement was Anne Lauvergeon, the former head of nuclear reactor maker Areva, who is currently on the board of Vodafone Group.
The Financial Times reported that Pierre Moscovici, the current Finance Minister in France, had said that the state’s representatives on the France Telecom board would act “solely in the interests of the company”.