Court Backs Vivendi in AGM Vote Debacle As Stock Plunges

06 May 2002

At last some good news for embattled Jean-Marie Messier, ceo of Vivendi Universal. A French court last week upheld the firm’s petition to call a new shareholder meeting after alleged tampering with the computer voting system used at the group's recent annual general meeting.

The original meeting on April 24 required the presence of riot police while Messier defended his job against an axis of investors angry at the group’s performance and demonstrators protesting his sacking of popular Canal Plus boss Pierre Lescure.

During the meeting a number of resolutions backed by Messier were blocked, including a proposal to reserve 5% of Vivendi shares for executive stock options. Messier’s subsequent decision to annul all votes and call a new meeting on the basis of “fraudulent manipulation” prompted threats of legal action by some shareholders [WAMN: 29-Apr-02].

However, a court hearing upheld Vivendi’s argument that there was a “malfunctioning in the counting of votes,” and ordered a new shareholder assembly to be organised as soon as possible so as to “put in order the vote of resolutions rejected on April 24.”

Vivendi suspects the 'malfunction' was caused by a “small group lightly equipped with a transmitter-receiver and knowledgeable in detail of the procedures and technical protocols” of the voting system, which involved wireless handheld devices via which shareholders registered their vote.

The court also gave the green light to Vivendi’s petition for an investigation “to determine the possibility and existence of piracy.”

Separately, Vivendi’s stock price plummeted 6.7% to a five-year low Friday, following a downgrading of its debt rating by Moody's Investors Service.

According to Moody’s, “uncertainties about the further strategic evolution of the company, as well as challenges to [its] ambitious future revenue and profit growth plans” could mean that Vivendi’s debt reduction program is not implemented as quickly and comprehensively as planned.

Data sourced from: New York Times and Wall Street Journal; additional content by WARC staff