As indicated above, Jacques Saadé found new methods to cover-up the various embezzlement and fraudulent acts, by announcing the merger between CMA and CGM.
This merger caused a huge stir in the media, the trade unions and the judiciary.
The merger auditors have expressed clear reservations by stating that the result of the various civil and criminal actions filed by Mistral and currently under course could have definite consequences as to the final share capital distribution and to the group’s assets.
Criminal lawsuits were filed against the transfer of the CGM shares held by CMA, to the benefit of Jacques Saadé. Due to these actions, legal investigations were launched against CMA’s head offices in Marseille, during which it was demonstrated that embezzlement of amounts exceeding 400 Million French Francs took place… The attorney general of Nanterre then asked the investigating judge of Marseille to transfer the case to Mr. Augonnet, the investigating judge in Nanterre, the latter having already launched inquires against Jacques Saadé for misuse of company assets. The attorney general of Nanterre opposed the merger which he considered as an attempt to disguise the offences which Jacques Saadé was accused of.
Consequently, the attorney general submitted a harsh report to the president of the Commercial Tribunal of Nanterre stating the prevailing situation and asking him to designate an ad hoc administrator. A compromise was reached and two experts were assigned in order to verify the company’s accounts.
The investigating judge of Nanterre had launched an inquiry in Marseille investigating CMA-CGM’s auditors, Coopers & Lybrand. During the inquiry, people in charge directed the judicial police towards an archiving company claiming that the documents pertaining to CMA-CGM were held there.
The next morning the judicial police went to the archiving company’s premises and at the precise moment when the archive boxes containing the required files were to be delivered to them, one archive box containing accounting documents was stolen by two masked individuals. The investigation of this matter was entrusted to the criminal police of Marseille.
THE INDICTMENT
On 27 November, 1998, the investigating judge in the Public Prosecutor’s office in Nanterre, Mr. Augonnet, notified Jacques Saadé of his indictment for misuse of company assets.
On the 5th of February, 1999, and after extensive questioning of Jacques Saadé, the investigating judge placed him under judicial supervision forbidding him, among other things, to directly or indirectly manage CGM or to directly or indirectly contact any member or any director of the said company.
Jacques Saadé, found himself constrained and therefore resigned from all his companies’ positions in CGM, CMA or CMA-CGM Holding.
The Public Prosecutor’s office in Nanterre requested that the case be withdrawn from the investigation filed in Marseille and thus the preliminary investigation filed in Marseille ended up in Nanterre with Mr. Augonnet, the same investigating judge handling the other criminal lawsuits filed by Johnny Saadé in Nanterre.
EXTRACTS FROM JACQUES SAADÉ'S EXAMINATIONBelow are few excerpts from the report on the questioning of Jacques Saadé by the investigating judge in Nanterre on 11 June, 2003:
“These passages are taken from a report issued by an Expert in the Court of Appeal of Paris, and approved by the Supreme Court” 17.
Among the many examples provided by the Expert, some are very complex and technical; we include the following comments:
"At one point in the questioning, reference was made to a commission of 129,000 USD paid by TEXACO to CMA International (London)."
The reply from "the party being questioned" is simple in every respect:
"For reasons of confidentiality, Texaco did not want the amount of the discounts benefiting CMA to be known, and made payment of these amounts in favor of CMA International..."
But, let us make an assumption! TEXACO therefore requires confidentiality. Why would not CMA S.A. guarantee that confidentiality?
A bit further on, "the party being questioned" explains the flow of funds:
“… The objective ... to avoid paying taxes in Lebanon. I understand, if I read it right, says the Expert that this would be tax fraud to the detriment of the Lebanese Government.”
If this party has defrauded the Lebanese tax authorities, has he done so with other tax authorities including that of France?
And, in the conclusion to this chapter on presumed fraud, the Expert states the following:
"If, on the one hand, one refers to the numerous findings set out above, particularly those deriving from the "questioning" of Jacques Saadé, but also, on the other hand, the episode concerning the "overvaluation" of ships, one could put forward the hypothesis, to be verified, certainly, but not devoid of interest, that a system of embezzlement through the payment of commissions, for example, might have existed to the detriment of CMA S.A., CGM S.A., or CMA-CGM ..."
Here, in a few passages taken from the report consisting of four volumes, is the indisputable proof of the swindling committed against Mistral (Johnny R. Saadé's group) and of the fraud perpetrated to the detriment of the Lebanese and French tax authorities.
BLACKMAILThe Mistral group (Johnny R. Saadé) disputed the repeated misdeeds of Jacques Saadé's management. The latter went ahead with calls for an increase in capital for the purpose of diluting the equal shareholding of Mistral, thus depriving it of any status that allows it to intervene with the authorities concerned and to request the return of CMA’s funds illegally embezzled in favor of the Merit group (Jacques Saadé).
The Boards and meetings formed exclusively of Jacques Saadé's family members and supporters who had ratified the increases in capital to which the Mistral group had been prevented from subscribing because of allegedly being 2 minutes and 40 seconds late; a well-established set-up had been arranged, with the speaking clock and bailiff in support, in a vain attempt to legalize this manipulation.
A claim was filed with the relevant authorities in Marseille and a criminal complaint was filed in Nanterre for fraud, misuse of company assets, and forgery of private and public documents. This criminal lawsuit followed its course. Jacques Saadé was questioned on several occasions, formally investigated, and prohibited from leaving French territory.
Faced with Mistral's determination, Jacques Saadé then engaged in a despicable blackmail attempt in which he proposed the re-integration of the Mistral Group's (Johnny R. Saadé) shares on the condition that the latter waives and withdraws all its pending actions and refrains from any further claims . This proposal was obviously turned down.
JUDGE PREVOST’S INDIGNATION Le Monde 3 February, 2004
AFTER THE RULING IN NANTERRE, another sensitive case was the subject of a discreet dismissal in Nanterre. The Director of Alain Juppé's cabinet intervened in the buyback of the Compagnie Générale Maritime by Jacques Saadé.
Confidential UNTIL NOW, the ruling, rendered in the sluggishness of a heat wave, somewhat shook off the Courts of Nanterre (Hauts-de-Seine). On 1 August, 2003, Jacques Saadé, a Franco-Lebanese ship-owner, was granted a dismissal in the investigation of the buyback of Compagnie Générale Maritime (CGM) by his company, Compagnie Maritime d'Affrètement (CMA).
Investigated since 27 November, 1997 for "misuse of company assets", Mr. Saadé was accused by his brother, Johnny (the originator of the legal proceedings) of having acquired CGM at the time of its privatization, October 1996, for an amount inferior to its value by taking advantage of political friendships and by unduly using CGM's funds in favor of CMA. Closely watched by the Elysee Palace from the start, the investigation has reached an unexpected epilogue.
On Wednesday, 30 July, 2003, the investigating Judge, Frédéric Campi, on the verge of leaving the Court of Nanterre (he took over his role at the Court of Marseille in September 2003), notified the Public Prosecutor that he had completed his investigation. Two days later, on Friday, August 1, Jean-François de Valbray, First Substitute, provided Mr. Campi with dismissal requests in favor of Mr. Saadé. On the same day, Judge Campi, just before definitively leaving the investigation Office No. 5, delivered a dismissal order, in which he limited his explanations to having adopted “the grounds submitted” by the Public Prosecutor,.
Lawsuits abandoned
In his indictment, the substitute for the Public Prosecutor stated that "the financial transactions in dispute related for the most part to the use made by CMA of CGM's funds (...) were justified both by their accounting entries and the best interest of the CMA-CGM group."
“Given that the economic success of the merger of these two companies, which occurred in 1999, has now proven to be accurate (..); and given that both civil parties, Johnny Saadé and the central works council, waived their actions of 19 September, 2000 and 5 June, 2003 (..); and given that the experts’ reports, which contradict one another, did not demonstrate manipulations that could prove swindling during the privatization process by presenting false balance sheets and overestimating assets", the substitute Prosecutor thereby recommended that the lawsuits be abandoned.
The haste in which this dismissal seems to have been delivered surprised Judge Isabelle Prévost-Desprez, who succeeded Frédéric Campi in September 2003. At the end of 2003, she discovered that he had closed the file although an international judicial search investigation which was still in progress in Great Britain. Even more surprising is that the Judge noticed that the Prosecutor in Nanterre had provided Judge Campi with a request for information from the British on 22 April, 2003. This correspondence was registered only on Tuesday, August 5, 2003, once the investigation had been closed and Mr. Campi had left the courthouse. Mrs. Prévost-Desprez shared her surprise with the Public Prosecutor of Nanterre on January 27. In this letter, the Judge, referring to the request of the legal authorities in Great Britain, wrote "You transferred this request on 22 April, 2003 to Mr. Campi and your correspondence was apparently recorded on 5 August, 2003 in Office No. 5. It appears that your Investigation Office placed requests for dismissal in this file on 1 August, 2003 (..). The dismissal order was granted on the same day requested. I note that the police was not advised that this file was closed." Mrs. Prévost-Desprez also informed the President of the Court of Nanterre of these facts.
A highly sensitive case
This episode is added to a series of incidents that interfered with this inquiry from the start. On 23 March, 2000, during a search in an archiving center in Marseille, a box containing documents related to CMA was stolen from the police. Furthermore, the premises of the judicial expert responsible for the file for the Court of Nanterre were burglarized three times. An expert report and accounting documents of CGM were stolen, proving the highly sensitive nature of this case. During the inquiry, the name of the President of the Republic was quoted when the content of documents seized by the Financial Investigation Department from Hotel Matignon on 7 December, 2000, was revealed. The examination of the archives related to the CGM privatization revealed details of the war that this file caused between Matignon and Bercy.
