Marionnaud ordered to compensate shareholders

By Katie Nichol

- Last updated on GMT

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French cosmetics and perfume retailer Marionnaud has been ordered to compensate 124 of its minority shareholders for falsifying company accounts between 2002-2004.

According to news agency AFP (Association France Presse), Marionnaud must pay the shareholders involved €500 compensation each and an additional €6.84 per share.

The case was brought to attention when on 17 December 2004, Marionnaud announced corrections to accounting errors of more that €90m, which caused share prices to fall steeply.

Investigation led to civil action being taken

Deminor, a European company offering services to investors, launched an investigation after being contacted by many of Marionnaud’s shareholders.

According to Deminor, this then led to the shareholders engaging in civil action against the company, with the compensation ruling taking place on 19 January 2010 at the Tribunal de Commerce in Créteil, Val-de-Marne, France.

Fabrice Rémon, on behalf of Deminor told AFP that the court had found Marionnaud’s financial communication during the period in question to be “constant in its false optimism...of a nature likely to artificially inflate stock market prices.”

Former CEO fined and given suspended sentence

The compensation ruling is the latest stage in the case against Marionnaud, which in 2008 saw its former CEO Marcel Frydman convicted of falsifying the accounts. previously reported that the tribunal found him guilty of 'spreading false information', which resulted in an 18-month suspended prison sentence and a fine of €300,000.

His son, Gerlad Frydman was director of finances at Marionnaud at the time, and was also implicated in the case along with the accounts director.

Frydman junior was handed an 8-month suspended sentence and a fine of €100,000, and former accounts director Laurent Ferré was given a suspended sentence of 4-months, escaping without a fine.

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