Plan for Jeff Tunnell

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June 21, 2004 | PARIS (AP) -- Jean-Marie Messier, the former chief executive of Vivendi Universal, was taken into police custody Monday in an investigation into financial wrongdoing during his time at the media and telecommunications giant, police said.


Police said Messier was being held by the financial crime brigade and could remain in custody for questioning for up to 48 hours.


Messier was ousted in July 2002 as the company's finances crumbled and its debt spiraled out of control.


French investigating magistrates are probing a massive share buyback in which Vivendi allegedly spent over $1.2 billion to prop up its own share price in the weeks following the terror attacks of Sept. 11, 2001.


Messier and his top team are suspected of buying back Vivendi shares well above the authorized volumes even while the company was presenting its financial results -- a practice strictly forbidden by stock market rules.


Prosecutors launched the investigation in October 2002 after a small shareholders' group filed a formal complaint. The group, APPAC, said the actions of Vivendi's former management deceived investors and caused many of them to lose money.


Earlier this month, as part of the same probe, Vivendi's former CFO, Guillaume Hannezo, was placed under investigation on suspicion of insider trading and share price manipulation.


Hannezo served as Vivendi's chief financial officer under Messier, who had dreamed of transforming the Paris-based company from a water utility into a media titan.


Messier's buying spree racked up billions of dollars in debt and took the company to the brink of bankruptcy, wiping more than 80 percent off its share value.


Vivendi has since been working to sell most of its entertainment assets, and recently spun off its film and television arm, including the Universal studios, to form NBC Universal, controlled by NBC's parent General Electric Co.


Investigators on both sides of the Atlantic have been examining financial information provided by Vivendi during Messier's tenure as chairman.