Mandatory disclosure

18 May 2004

Directors who buy securities issued by their own company face potential conflicts of interest. And the same holds for relatedparty deals. There is no evidence that Jean Rene Fourtou succumbed to these temptations. But had he told the market, no one would have raised an eyebrow.

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Vivendi Universal boss Jean Rene Fourtou's charitable foundation and children bought almost E20m of quasiequity in the French media and telecoms group via an issue of mandatory convertible bonds in November 2002.

Fourtou did not publicise these purchases after checking with the stock market regulator whether or not he was obliged to disclose them.

In advance of the deal, which was equivalent to a forward sale of stock, Fourtou asked the regulator whether executives could subscribe, according to a person familiar with the situation. He was told that nothing would stop them from subscribing provided that they were not in possession of privileged inside information, that person said.

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