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French prosecutors have begun investigating corruption allegations linked to telecoms group Altice, expanding a probe that began in Portugal and led to the arrest of the company’s co-founder last summer.
The investigation by Paris-based financial prosecutors is a preliminary one, meaning it is yet to lead to formal charges.
It is focused on suspicion of corruption of individuals who do not hold public office, money laundering offences and attempts to cover those up, a court official said, and began last September after Armando Pereira, Altice’s co-founder alongside Patrick Drahi, was arrested by Portuguese investigators in July.
Bloomberg first reported the French probe on Friday. Altice declined to comment.
The French investigation follows a period of deep turmoil for Altice after the allegations involving Pereira emerged last year. The Portuguese executive, who has denied wrongdoing, is accused of working with others to rig Altice’s procurement process and contracts with suppliers, leading to allegations that several hundred million euros were siphoned off illegally.
Altice said the company was a victim of the alleged scheme to defraud the company. Franco-Israeli billionaire Drahi, meanwhile, who built up Altice through a series of debt-fuelled acquisitions, has also denied any knowledge of such a scheme and said he felt betrayed and that the allegations had come “as a huge shock”.
Pereira was less well-known outside the company but described by co-workers as omnipresent internally, where he had several important roles, including as chief operating officer. He was Drahi’s right-hand man for decades.
Since last year’s allegations came out into the open — the result of a three-year Portuguese investigation — Altice has launched internal probes and suspended several employees.
The group has also been selling assets to help reduce its $60bn debt pile, as rising interest rates push up the cost of servicing its debts. Last November it sold a majority stake in its data centre business to a Morgan Stanley infrastructure fund.
In October Altice International, one of the three main companies of the group, borrowed €800mn from investors through a term loan in order to repay bonds maturing in 2025.
Investment banks including Lazard, Goldman Sachs, Morgan Stanley and BNP Paribas have been tapped to explore the sale of various assets, such as Altice’s operations in the Dominican Republic and Portugal. Several preliminary bids have been made for the Portugal unit or parts of it, including from Xavier Niel’s Iliad and Saudi Telecom Company, with final offers expected in the coming weeks.
Bloomberg reported in February that US-based Charter Communications was working with advisers to explore a potential takeover of Altice USA, whose shares have lost more than 90 per cent of their value since it listed in 2017.
Bankers have also speculated Drahi may also sell French news network BFM and some of his 25 per cent stake in BT. However, so far the sales have moved slowly as Drahi has been hesitant to compromise on price, according to people with knowledge of the process. “He will have to sell some things eventually . . . but the fact that it’s taking so long means it isn’t going well,” one of the people said.
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