Bernard Arnault, CEO of one of the world’s leading luxury conglomerates, is currently at the center of an ongoing investigation over money laundering and ties with a Russian Oligarch.
Various news outlets have recently placed Bernard Arnault, CEO of luxury conglomerate LVMH, on the spotlight. As Le Monde recently reported, the billionaire is experiencing an ongoing investigation concerning transactions with Russian oligarch Nikolai Sarkisov back in 2018.
Tracfin, France’s anti-money laundering group, revealed that Sarkisov purchased 17 units in a building next to Arnault’s Le Cheval Blanc hotel. The sale cost a total of €18.3 million, with loans reportedly from the LVMH CEO himself, as per The Art Newspaper. The Paris district attorney confirmed that Arnault is part of a 2022 investigation on Sarkisov’s real estate deals. However, an ongoing investigation means that authorities have not accused either party of being guilty for money laundering.
The Art Newspaper stated that Sarkisov wasn’t in the list of European sanctions after Russia’s invasion of Ukraine. He also made the purchase years before the aforementioned event. However, the Russian oligarch is still part of a list of people that Ukraine sanctioned due to close affiliation with the Kremlin.
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Dubious Transactions
Sarsikov and his brother Sergei manage the Russian insurance company Reso-Garantia. In 2018, Sarsikov reportedly purchased properties around Courchevel ski resort (owned by Arnault). More specifically, these units were located in the exclusive Jardin Alpin quarter, as per The Guardian.
The Art Newspaper expounded on this, stating that Sarsikov made the €18.3 million purchases under the company “La Flèche,” rather than his name. However, Tracfin’s investigations traced the transactions back to Arrowband—a Cyprus-based firm whose only holder is the Russian oligarch.
Sarsikov allegedly conducted his operations with funds from Métropole 1850, a subsidiary of Arnault’s private holdings. As such, the Russian oligarch reportedly made a profit of €1.2 million. Tracfin investigators described him as a “straw man hired to conceal the actual beneficiary,” in this case, Bernard Arnault.
Legal Operations
Arnault’s legal team denied the accusations. Jacqueline Laffont, his lawyer, called them both “absurd” and “unfounded” in an interview with CNBC.
“The operation that was conducted to allow the expansion of the White Horse Hotel in Courchevel is well known and was conducted in compliance with the laws and with the support of councils,” she explained.
Representatives from Reso-Garantia have also rebuffed the allegations of money laundering on Sarsikov’s behalf. According to Igor Ivanov, RESO-Garantia’s Deputy CEO, Sarsikov and the insurance company didn’t personally conduct the transaction. In fact, he states that the Russian oligarch never met Arnault in person.
“The transaction was managed by a small investment unit which invests professionally in European real estate. It consisted of acquiring flats in an old building in Courchevel from various private owners, with the view to sell them later to a developer once the entire building was bought out,” he told CNBC in an email.
“All transactions were carried out by French companies, through French notaries by French lawyers on all sides. This was a usual real estate deal,” Ivanov continued.
Past Cases
This wouldn’t mark the first time Arnault got involved in a legal case. He lost one to French tax investigators earlier this year, as per Fortune. This involved the 2019 raid of LVMH headquarters in Belgium due to suspicions of tax fraud activities, according to Reuters. The company, however, released a statement on the issue. It wrote that it concerned “purely procedural issues and European law,” and that French authorities were well aware of their activities.
In her statement with CNBC, lawyer Jacqueline Laffont adds: “Who can seriously imagine that Mr. Bernard Arnault, who for the past 40 years has built France and Europe’s top company would engage in money laundering to expand a hotel? I think that the senseless nature of these allegations cannot escape anyone.”
Banner photo by Jérémy Barande via Wikimedia Commons.
