French billionaire Bernard Arnault and Russian Oligarch Nikolai Sarkisov are under “preliminary investigation” for their alleged involvement in “transactions likely to constitute money-laundering offences,” the Paris Public Prosecutor’s Office told CNN.
The Prosecutor’s Office confirmed earlier reporting from French publication Le Monde.
As the subject of a preliminary investigation, Arnault is not suspected and has not been accused of wrongdoing.
The prosecutor’s office said they added a memo from the French economy ministry’s financial intelligence watchdog (Tracfin) related to real estate transactions involving both Arnault and Sarkisov to an ongoing preliminary investigation into the Russian oligarch’s operations in France, which started in 2022.
Le Monde, which said it had access to the memo, said the memo was sent by Tracfin to the Public Prosecutor’s Office in Lyon in December 2022. The newspaper says the case was “quickly” transferred to the Paris prosecutor’s office, which asked the national-level anti-money-laundering watchdog, to look into it.
Le Monde reports that per that memo, companies belonging to Sarkisov acquired fourteen properties in the luxury Alpine resort of Courchevel in the Fall of 2018 for 16 million euros ($17 million). They achieved this via a complex set-up of companies in France, Luxembourg and Cyprus, according to Le Monde.
Citing the memo, Le Monde said that Sarkisov’s name did not appear on the books of the company which carried out the purchase, called SNC La Fleche, although the oligarch was described by Tracfin as its effective owner through a network of holding companies.
Within the same period, Le Monde said SNC La Fleche acquired three other properties in the same neighborhood from a company called SNC Croix Realty, for 2.2 million euros. Sarkisov also owned SNC Croix Realty at the time, according to Le Monde. Le Monde, citing the memo, says SNC Croix Realty made a 1.2 million Euro profit upon the sale of the units they had bought a year earlier.
Tracfin also believes French billionaire Bernard Arnault loaned 18.3 million euros ($19.4 million) to Sarkisov for the deal through his private holding company, per Le Monde. According to the French newspaper, the LVMH chairman then bought La Fleche in December 2018.
According to Le Monde, the Tracfin memo explains Arnault first loaned the amount to one of Sarkisov’s companies, before acquiring the company that owned these assets. Le Monde adds the investigation will have to “determine the reason for this apparent incongruity,” as well as “explain the need for Mr. Arnault to call on Mr. Sarkisov as an intermediary in these transactions.”
“The change in the final beneficial owner of the real estate acquisitions (…) tends to conceal the exact origin of the funds, to complicate the transactions and the identification of the real purchaser, and to reflect a desire to conceal the actual beneficiary of all these transactions, i.e. Bernard Arnault,” Tracfin investigators wrote in the memo, fuelling their suspicions of “money laundering.”
CNN cannot independently verify the content of the Tracfin documents.
Le Monde cited a person close to Arnault who said the transaction had been “carried out in strict compliance with the law,” adding that “as with any real estate transaction” there were legal parties involved “responsible for ensuring compliance with all existing regulations.”
Sarkisov’s team told Le Monde that the Russian businessman was “not at all personally involved” in these transactions and that at the time “there were no known business links between the two men.”
Sarkisov is not on the European Union’s list of individuals sanctioned in response to Russia’s full-scale invasion of Ukraine in February last year.
CNN has reached out to Tracfin and LVMH for comment and is reaching out to Nikolai Sarkisov.
According to the Bloomberg Billionaires Index, Arnault’s net wealth of $164 billion makes him the world’s second-richest person behind only Elon Musk.
LVMH is one of Europe’s biggest companies, encompassing luxury fashion and drinks brands such as Louis Vuitton and Moet & Chandon. It did not immediately respond to a CNN request for comment.
Arnault bought a controlling stake in LVMH in 1989, two years after the group was formed by the merger of Louis Vuitton and Moët Hennessy. He has been chairman and CEO of the company ever since.
Over the past three decades, Arnault has turned LVMH into a luxury goods powerhouse with 75 labels selling wine, spirits, fashion, leather goods, perfumes, cosmetics, watches, jewelery, luxury travel and hotel stays.
— Anna Cooban contributed to this article.
Read the full article here