Richard was this week handed a one-year suspended prison sentence for complicity in the misuse of public funds back in 2008
Yesterday, long-serving Orange CEO and chairman Stephane Richard handed in his resignation at a board meeting following his conviction in the misuse of public funds.
The court case itself related to a 2008 settlement, back when Richard was chief of staff to then French Finance Minister Christine Lagarde. At the time, French businessman Bernard Tapie was in a dispute with the government following his sale of a stake in Adidas to a government-backed bank, resulting in a €400 million pay-out which Richard oversaw. This pay-out was later deemed illegal, which resulted in Lagarde’s own conviction for negligence in 2016.
Since then, there has been a long running legal battle of Richard’s own liability in the process, which came to a head this week when he was cleared of fraud but convicted of complicity in the misuse of public funds and handed a one-year suspended sentence.
Richard was also fine €50,000.
Richard says he will appeal the court’s decision, saying in a statement that he rejected the charges as being “without any foundation” and “profoundly unjust”.
“I simply carried out a ministerial decision to go to arbitration for which Christine Lagarde assumed complete responsibility and for which she was then found guilty of simple negligence,” he said.
As a result of the decision, Richard immediately handed in his resignation. Even if he had not, it seems likely that he would have been removed anyway, with the government, which owns a 23.04% stake in the company, having a policy of removing executives in state-owned company’s that have been convicted of a crime.
Coincidentally, Richard’s term as CEO was due to expire in the middle of 2022. Now, he is set to leave the role no later than the end of January next year.
This move should come as a significantly blow to Orange, a company that has been rehabilitating its public image over the past decade, following a spate of suicides by employees in 2008 and 2009. Richard, who took over as CEO in 2011, was instrumental in rebuilding not only Orange’s reputation with workers’ unions, but also its finances, notably increasing the company’s revenues and market share in France.
“The Board thanks him for his commitment at the helm of Orange for the past 11 years, from restoring an appeased working environment after the social crisis to the transformation of Orange into a leading multi-service operator in Europe and Africa. Stephane will have contributed significantly to the history of the Group in sometimes tumultuous times and always working in the best interests of the company,” said Orange’s Board of Directors in a statement.
Exactly who will replace Richard is unclear, though possible frontrunners include Gervais Pellissier, Orange’s Executive Director of Human Resources and Group Transformation, and Ramon Fernandez, the company’s Executive Director of Finance.
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