French billionaire Bernard Arnault, the CEO of luxury conglomerate LVMH Moet Hennessy Louis Vuitton SE, is reportedly under investigation for possible money laundering.
The investigation, initiated by the Paris public prosecutor’s office, focuses on Arnault’s dealings with Russian businessman Nikolai Sarkisov and their transactions related to properties in the exclusive ski resort of Courchevel, Bloomberg reported Friday (Sept. 29), citing an article by Le Monde newspaper.
LVMH did not immediately reply to PYMNTS’ request for comment.
Sarkisov purchased several properties in Courchevel in 2018 through intermediary companies, according to the report. It was later found that the ultimate buyer of these properties was Arnault. The investigation alleges that Arnault paid Sarkisov approximately 20 million euros ($21.2 million) for these assets, while Sarkisov reportedly profited around 2 million euros ($2.1 million) from the deals.
The investigation is focused on whether these transactions were used to conceal the origin of the funds and the identity of the ultimate buyer, the report said.
Le Monde cited sources familiar with Arnault, who claimed that the deals were conducted within the boundaries of the law.
It was reported in January that Arnault gained an even greater lead as the world’s richest person when LVMH’s market capitalization reached a record high. When the fashion and luxury goods group’s share price rose to over 800 euros (about $863 at the time) on Jan. 17, the company’s market cap reached 400 billion euros (about $431.5 billion) for the first time, Reuters reported at the time.
More recently, LVMH reported in July that it had seen a drop in U.S. sales during the second quarter, attributing the change to a decrease in shopping activity among aspirational shoppers on entry-level products compared to their previous habits.
Company executives added that LVMH’s high-priced goods are performing well in the U.S., possibly because wealthier shoppers are less affected by inflation, student debt and economic fluctuations.
LVMH is also involved in the potential initial public offering (IPO) of German footwear brand Birkenstock, as LVMH backs the brand’s owner, private equity firm L Catterton. L Catterton and the family investment company of Arnault acquired a majority stake in Birkenstock two years ago in a deal that valued it at roughly 4 billion euros ($4.2 billion).
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