Veolia chief faces boardroom coup
February 20, 2012 12:56 pm
By James Boxell in Paris
Antoine Frérot, chief executive of Veolia, the world’s biggest water utility by sales, is facing a boardroom coup orchestrated by his former mentor, Henri Proglio, the boss of EDF.
In a tale of intrigue that is typical of the highly political nature of big business in France, Mr Frérot could face an attempt to oust him at the company’s next board meeting on February 29, when directors will be asked to sign off on annual losses of €200m ($265m).
One name in the frame to take over from Mr Frérot is Jean-Louis Borloo, a centrist former minister who industry insiders say
could be being lined up for a reward after deciding not to run against Nicolas Sarkozy, the incumbent, in the forthcoming presidential elections.
A senior French industrial source said: “This is an attempt at destabilisation that shows the collusion between the world of politics and business.” News of the attempt to remove Mr Frérot first emerged on Monday in Les Echos and Liberation, two French newspapers.
Mr Proglio built Veolia, a provider or drinking water and waste water services to 173m people, into a global company with €35bn of annual sales after its spinoff from Vivendi in 2000. But he left it saddled with debt and with operations that have struggled badly, notably in north Africa, Italy and North America.
Mr Frérot took over as Veolia chief executive in 2009 after Mr Proglio took the helm of EDF, the French nuclear power group. For a period, Mr Proglio remained as chairman of Veolia while running EDF, before he was asked to step down because of objections over corporate governance. Mr Proglio is still on the board of Veolia, and has approached several directors to seek the removal of Mr Frérot.
Relations between the two men soured badly last year after Mr Frérot implicitly criticised the legacy left to him by Mr Proglio and said he would move out of almost half of the 77 countries where Veolia does business. In a plan that was signed off by the board, Mr Frérot said he had given himself two years to turn things round after announcing the plans to reverse Mr Proglio’s expansion drive and a €5bn fire sale of assets to cut the company’s €14.7bn net debt.
Veolia last year delivered two profit warnings and an €800m writedown. Mr Frérot is planning to sell its 50 per cent stake in Transdev, one of the world’s biggest public transport groups. He also wants to sell its UK water business and US solid waste division.
The coup attempt by Mr Proglio, who is one of France’s most powerful businessmen because of his close ties to Mr Sarkozy, is particularly audacious given that his own future at EDF is under a cloud. François Hollande, the Socialist candidate in April and May’s presidential elections, is ahead of Mr Sarkozy in the polls and has indicated in private that Mr Proglio’s position would be under threat should the socialists win because of the EDF boss’s staunch support of nuclear power.
Mr Hollande’s senior advisers denounced the coup attempt as a sign of the “Sarkozy system”, in which decisions on who runs France’s companies are made as “little arrangements between friends at Fouquet’s”, the restaurant on the Champs-Elysées favoured by the French president. Veolia is a privately owned company, though EDF still owns a 3.9 per cent stake.
Augustin de Romanet, who recently stepped down as head of head of Caisse des Dépôts et Consignation, the French state bank that owns 9.5 per cent of Veolia, has also been mentioned as a possible successor.
Mr Sarkozy’s office said it was for the company’s board to decide who should be chief executive.
Shares in Veolia fell about 4 per cent as investors reacted unhappily to the claims of possible political interference at the top of the company.
Enviado: 23/11/2018 17:22
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