Bernard Arnault, the wealthiest individual in Europe, is under investigation for potential money-laundering activities.

 

The world’s second richest man Bernard Arnault is at the centre of an alleged money laundering scandal.

The Paris public prosecutor’s office is investigating financial transactions involving the boss of the luxury goods giant LVMH and a Russian billionaire, Nikolai Sarkisov, whose brother Sergey founded one of Russia’s biggest insurance companies Reso-Garantia.

The probe concerns their activities in Courchevel, an exclusive ski resort in the French Alps known for being a playground for the ultra-rich, especially rich Russians before the war in Ukraine.

Sarkisov, 55, reportedly acquired more than a dozen properties in 2018 at the luxury Alpine hot spot through a complex deal in which Arnault, through one of his companies, allegedly provided a loan.

According to reports from newspaper Le Monde, Arnault’s loan was worth an estimated £16m, and the arrangement – which involved companies based in France, Luxembourg and Cyprus – allowed the Russian oligarch to pocket a profit of around £1m.

Bernard Arnault, at the age of 74, assumes the roles of founder, chief executive, and chairman at the helm of Louis Vuitton and Moet Hennessy’s parent company, LVMH. Over his decades of leadership, he has earned the moniker ‘the wolf in cashmere’. His estimated net worth stands at a staggering £134 billion, as per the Bloomberg Billionaires Index.

The Arnault family commands a substantial 41 per cent stake in the conglomerate, which boasts a portfolio encompassing opulent brands such as jeweller Tiffany’s and watchmaker Tag Heuer.

However, the French magnate finds himself ensnared in a precarious situation. An unidentified official from the financial intelligence unit Tracfin within the French finance ministry has intimated to Le Monde that the transaction with Sarkisov might have been orchestrated to obfuscate the origins of the funds employed for the property.

The public prosecutor’s office in Paris has disclosed the initiation of a preliminary investigation last year and affirmed to Reuters that transactions involving Arnault and Sarkisov are integral to the inquiry.

Arnault maintains a distinct affinity with Courchevel, where he acquired the art of skiing during his formative years. In parallel, Sarkisov’s spouse, Ilona Kotelyukh, has reverently described Courchevel as ‘my oasis’, according to accounts from The Times in the preceding year.

A representative from Reso-Garantia has stated, ‘The transaction was overseen by a compact investment unit adept in European real estate. It entailed the acquisition of apartments within an antiquated edifice in Courchevel from diverse private proprietors, with the ultimate intent of vending them to a developer once the entirety of the edifice was procured. Every transaction was executed through French enterprises, facilitated by French notaries, and guided by French legal practitioners on all facets. This followed the standard protocols of a real estate transaction.’

LVMH has remained elusive for comment. Nevertheless, Le Monde has quoted a confidante of Arnault affirming that the transaction was executed within the purview of French jurisprudence.

Yet, this investigation undoubtedly constitutes a substantial setback for Arnault, who suffered a legal defeat in February in a high court battle against French fiscal investigators regarding the legitimacy of a 2019 raid on LVMH’s headquarters. The raid was linked to an inquiry into tax malfeasance pertaining to operations in Belgium.