The French specialty chemicals group Rhodia is under investigation for accounting faults which allegedly took place while French Finance Minister Thierry Breton was a member of the board, a judicial source said.
The finance ministry said that Breton, who was travelling to Japan, was untroubled by the probe because he had "put in place rules of governance" at Rhodia and "in particular an audit committee".
A ministry spokesman told AFP: "We are untroubled about this". Breton is accompanying French President Jacques Chirac on an official visit to Japan.
Rhodia told AFP that an investigation against unnamed parties had been opened in October 2004 following two complaints which did not name any particular person.
"This is a normal step in the judicial process," a spokeswoman said. "Since then, the members of the current board have never been questioned nor even contacted by law officers regarding this procedure."
A report in the French financial daily Les Echos on Friday alleged that an investigation had been opened in October into accounting practices between 1999 and 2002.
Breton sat on Rhodia's board from April 16, 1998 to September 24, 2002.
He was also president of the French electronics group Thomson at the time.
Two investigating judges, Henri Pons and Jean-Marie d'Huy, have reportedly been charged with investigating the company's accounts following complaints filed in 2003 by two shareholders.
They were Edouard Stern, a high-profile French banker who was murdered at his home in Geneva on February 28 in a crime for which his mistress has been arrested, and a person named as Hughes de Lasteyrie.
The investigation concerned "the presentation of inexact accounts, the spreading of false and untruthful information on the situation of an issuer quoted on a market subject to rules, insider trading, and benefiting from insider trading", Les Echos reported.
Breton told the French daily Le Monde in its edition dated Thursday that he had proposed the creation of an audit committee while he was a member of the Rhodia board.
His comment was in reply to a question about a probe by the French financial markets authority AMF concerning Rhodia, and which apparently concerned only the year 2003.
Breton told Le Monde: "Nothing that I saw shocked me nor upset my ethics."
On Friday, the Rhodia spokeswoman said company directors "did not know what position the AMF would take regarding the next steps in the investigation".
Listed on the Paris stock exchange since 1998, Rhodia has faced severe financial problems, posting losses since 2002 and skirting bankruptcy last year. |
