LDN - Business

Orange CEO puts his fate in hands of board after conviction

[November 24, 2021] By Mathieu Rosemain

PARIS (Reuters) -Orange CEO Stephane Richard said on Wednesday it was up to the board of France's biggest telecoms company to decide whether he should remain after a Paris appeal court convicted him of complicity of misuse of public funds.

Richard said in a statement he would appeal the court's verdict, which handed him a one year suspended prison sentence, adding it was "deeply unfair".

"I place my mandate within the hands of Orange's board of directors," said Richard, who was acquitted in a first trial.

French Finance Minister Bruno Le Maire has repeatedly said that the government position is that bosses of state-owned companies should quit if convicted of a crime. A finance ministry statement noted the verdict and said it was paying close attention to the proper functioning of the company.

Orange is due to hold a board meeting at 1700 GMT, a company spokesman said. Two sources close to the matter said it would be difficult for Richard, who has denied any wrongdoing, to keep his job.

Richard, who also received a 50,000 euro fine but was cleared of the charge of complicity of fraud, declined to comment when asked by reporters whether he would resign as CEO after the verdict. He hastily left court, accompanied by Orange's communications head Béatrice Mandine.

The former civil servant had already told French media that he would not seek to remain CEO at the end of his third four-year term in May 2022 but was keen to stay on as chairman.

The case concerned a 400 million-euro ($450 million) French state payout to the late business tycoon Bernard Tapie in 2008.

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Chairman & CEO of Orange Stephane Richard attends an interview during the Mobile World Congress (MWC) in Barcelona, Spain, June 29, 2021. REUTERS/Albert Gea/File Photo

At the time, Richard was chief of staff to then French Finance Minister Christine Lagarde, who is now President of the European Central Bank. Lagarde, who had also denied wrongdoing, was convicted of negligence over the affair in December 2016.

Judge Sophie Clément said Richard had "committed grave acts by favouring the interests of Bernard Tapie at the expense of those of the state."

Richard is credited with having improved relations between employees and executives at Orange and bolstering its financial results after the arrival in 2012 of Iliad's low-cost brand Free, which triggered a protracted war in the mobile business.

Under his leadership, Orange expanded its telecoms activities overseas in Africa and launched a new online banking service. It also heavily invested in its networks, notably in its broadband fibre networks in France and Spain.

However, Orange's stock price has not improved during Richard's tenure. Its shares, which traded at around 11 euros when he first became CEO, were little moved after the court verdict and stood at just under 10 euros.

(Reporting by Mathieu Rosemain; Writing by Silvia Aloisi; Editing by Alexander Smith)

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