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Phitrust

A parody of governance at Vivendi’s AGM

Vivendi’s Annual General Meeting took place on Thursday 19 April at the Olympia Theatre in Paris. A parody of governance took centre stage, with worrying implications for the future of the company.

CONFUSION OF ROLES BETWEEN SUPERVISORY BOARD AND MANAGEMENT BOARD

Surprising the shareholders, Vincent Bolloré announced that, immediately following this Annual General Meeting, a Supervisory Board meeting would take place at which he intended to propose the appointment of his son, Yannick Bolloré, as Chairman of Vivendi’s Supervisory Board (having previously stated that he intended to leave in 2020). However, Yannick Bolloré is a member of the Supervisory Board and, at the same time, director of the subsidiary Havas. This raises questions on the role of the Management Board.
In novembre, we questioned Vincent Bolloré on the presence of directors of the Bolloré Group, shareholders of Vivendi, on the Management Board, while subsidiary directors including Yannick Bolloré and Dominique Delport were members of the Supervisory Board. This situation runs counter to good governance, which would dictate that shareholder representatives sit on the Supervisory Board and certain members of the Management Board may hold executive positions in subsidiaries. The decision to appoint Yannick Bolloré as Chairman of Vivendi while acting as chairman of the subsidiary Havas only heightens the confusion of roles!

DISREGARD FOR SHAREHOLDERS

The presentations were long, whereas the section for oral questions was shortened, after which Vincent Bolloré decided that it was time to vote on the 27 resolutions. Therefore, many shareholders were unable to ask their questions, although this is the only time when shareholders can confront and question executives on their strategy!
Another fault: in a desire to complete the voting procedures quickly, Vincent Bolloré cut the time devoted to electronic voting and forgot two resolutions! In 15 years of General Meetings, we have never witnessed such a flagrant disregard of the shareholders. Yannick Bolloré, who was participating in his first Vivendi AGM as director of Havas, must have gone to a good school!
We can also note the farcical manner in which everything is regarded as hunkydory and failures (Ubisoft, Telecom Italia, etc.) are dealt with in a few minutes with the same response: “there is no problem”… Shareholders, however, deserve more transparency regarding the difficulties the Company is facing in some of its businesses!

CONFUSING FINANCIAL INTERESTS WITH COMPANY INTERESTS

Vincent Bolloré was insistent on his interest in Vivendi. The Bolloré Group is progressively strengthening its equity, considering that the Vivendi share price, although performing better than the CAC 40, is well below its true value. Good news, depending on how you look at it, since Vivendi’s acquisition of Havas enabled the Bolloré Group to recover a significant amount of cash… The Bolloré Group controls Vivendi due to double voting rights (29.6%), holding 20.6% of equity (in 2015 Phitrust failed to get rid of these double voting rights): we may suppose that Vivendi’s cash is being used for financial purposes…

We have previously asked Vincent Bolloré if there were any financial agreements between the Bolloré Group companies and Vivendi’s subsidiaries. It would be logical, given the control exercised by the Bolloré Group over Vivendi, that the Company inform the shareholders of this so that they may be aware of all financial flows existing between all Bolloré Group and Vivendi Group companies. We have not received a response on this matter… The independent members of the Supervisory Board and the statutory auditors should look into this issue and provide us with a response; failing this, we may suppose the existence of financial flows between these entities, to the detriment of minority shareholders’ interests.

The strategy proposed by Vincent Bolloré has started to bear fruit in a number of business lines, particularly Canal+, which was until recently a major source of concern for the Group. It is unfortunate that hardly any other shareholders are taking up these issues with the Company and members of the Supervisory Board. The passivity of many investors (including those claiming to be “responsible”) leads to a situation in which control is effectively held by a family group which confuses governance and financial interests. It is a matter of urgency that the shareholders must react and inform the new Chairman of Vivendi of the measures that need to be taken in order to restore good governance within the Group, in order to provide it with a framework to support its development.

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