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19 June 2017 By Liam Proud Follow @liamwardproud

A shareholder group says the French media agency flattered its operating margin by including a one-off compensation payment. The company defends its accounting but the case is a dose of unhelpful publicity for an industry facing a bid-rigging probe and claims of opaque pricing.

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Shareholder organisation Gouvernance en Action said on May 17 it wanted the French financial markets watchdog, the AMF, to verify if Publicis shareholders had received the right information in relation to the accounting treatment of a payment it says was made to the French media company by German software firm SAP.

In a May 23 letter, Gouvernance en Action’s Fabrice Rémon asked Maurice Levy, who was chief executive of Publicis at the time, whether the company could confirm the existence of a 150 million euro payment, in the form of a 130 million euro cash transfer and 20 million euros of credits granted for future software purchases.

In an earlier May 17 letter to Levy, Rémon said the payment was an “exceptional transaction” that was used by the ad group to inflate its operating margin on an ad hoc basis without informing shareholders of the nature or amount of the payment.

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