L'Oréal management now plagued by shareholder suit
No rest for the French multinational
President of L'Oréal, Lindsay Owen-Jones, has said that he thinks any takeover of the group by Nestlé is "not in the least probable", adding that he had many reasons for saying this but it would be unfriendly to express them.
Owen-Jones also said the legal confrontation between Francoise Bettencourt and Liliane Bettencourt "stopped at the company's front door". He added that the interests of the family were identical with those of L'Oréal with the Bettencourts voting en bloc at board meetings.
However, only hours after Owen-Jones had said that there was "no room for family disputes" within the precincts of the company, news broke that a shareholder of L'Oréal has launched a legal action against both Owen-Jones and Liliane Bettencourt for having allegedly granted a contract to a photographer, Francois-Marie Banier. The lawyer for the shareholder, Maitre Canoy, said the contract ran counter to the company's interests.
While the very French media circus around the Bettencourt family affair appears to have little to do with the marketing and sale of L'Oréal's cosmetics, the fact is that the story and its various sub-texts has occupied as much if not more space in the serious Paris papers as L'Oréal's global business for over 18 months. The continuing media interest is seen as enormously distracting for L'Oréal and Owen-Jones.
This latest story involves the shareholder, Janez Mercun, who for 25 years has been a distributor of L'Oréal's cosmetic products in eastern Europe via his Swiss-based company Temtrade. A hearing of the first phase of a legal action has been set for 5 July in Paris. Rather obscurely this case has been set down for hearing in the name of another shareholder, though based on the same alleged facts. The nub of the case is that Banier is alleged to have benefited from a contract with L'Oréal. The company recently announced that it had cancelled all contracts linking the group with Banier because of the "media uproar" surrounding the Bettencourt affair and which made the pursuit of these contracts prejudicial to L'Oréal.