FRANCE: LVMH will not appeal AMF fine over Hermes
Moët Hennessy Louis Vuitton LVMH has decided to not to appeal against an EUR8m fine imposed by France's markets watchdog The Autorité des Marchés Financiers (AMF) in relation to its acquisition of of a 10% stake in luxury rival Hermès.
In July, the AMF fined LVMH after judging that the company had failed to properly disclose its stake building in Hermes before 2010.
LVMH said that while it would be "entirely justified in appealing" the decision, its commitment to the "soundest possible management of its investment in Hermès" will mean that it will not pursue the appeal.
The AMF committee noted the "unusual" way LVMH had acquired its stake in the company, buying equity stocks with a number of banks to avoid disclosure requirements and using foreign subsidiaries that were not listed as consolidated units until its 2010 annual report.
LVMH emphasised that it "never breached regulations regarding ownership thresholds or engaged in insider trading or market manipulation".
Hermès launched a fresh round of legal proceedings in June to obtain the cancellation of the equity swaps.
LVMH said that it plans to take all necessary action to end the "baseless legal proceedings being pursued by Hermès management and to recover compensation for the serious harm their actions have caused".
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