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French luxury conglomerate Louis Vuitton Moët Hennessy (LVMH) chairman Bernard Arnault is being investigated for possible money laundering. | Source: LVMH
French luxury conglomerate Louis Vuitton Moët Hennessy (LVMH) chairman Bernard Arnault is being investigated for possible money laundering. | Source: LVMH

Money laundering: LVMH chairman under investigation

French luxury conglomerate Louis Vuitton Moët Hennessy (LVMH) chairman Bernard Arnault is being investigated for possible money laundering.

In Paris, the public prosecutor’s office has revealed that Arnault’s dealings with Russian billionaire Nikolai Sarkisov have been under review for the past year.

The investigation focuses on property transactions at Cheval Blanc Courchevel, a luxury ski resort in the French Alps owned by LVMH.

French newspaper Le Monde reported that Sarkisov purchased a series of properties in 2018 via intermediary companies; however, the ‘end-buyer’ is allegedly Arnault.

“The existence of the investigation was only made public this week after Le Monde, the French newspaper, reported that the French authorities were looking into the purchase in 2018 by Sarkisov of more than a dozen properties in Courchevel, a ski resort in the French Alps, through a complex web of shell companies,” writes Aurelien Breeden of The New York Times.

"All transactions were carried out by French companies, through French notaries by French lawyers on all sides. This was a usual real estate deal."
Spokesperson for Reso-Garantia

“According to Le Monde, citing information from Tracfin, French financial investigators suspect Sarkisov of being a straw buyer for Arnault in the deal. It was not immediately clear why Arnault, one of the world’s richest men, might have used Sarkisov as an intermediary.”

Sarkisov, 55, owns and manages Reso-Garantia, one of Russia’s largest insurance companies, with his brother Sergei.

A spokesperson for Reso-Garantia said: “Neither Reso-Garantia, nor Mr Sarkisov personally has been involved in the transaction that was described in the Le Monde article. Mr Sarkisov and Mr Arnault have never met.”

Arnault is alleged to have paid Sarkisov approximately $US21.2 million ($AU32.94 million) to own the assets, with the pattern of transactions allegedly designed to mask the funds' origin and the buyer's identity.

“All transactions were carried out by French companies, through French notaries by French lawyers on all sides. This was a usual real estate deal,” the spokesperson said.

“The transaction was managed by a small investment unit which invests professionally in European real estate. It consisted of acquiring flats in an old building in Courchevel from various private owners, with the view to sell them later to a developer once the entire building was bought out.”

In a statement to CNBC, Arnault's attorney Jacqueline Laffont dismissed the allegations as 'absurd and unfounded'. 

"The transaction that allowed for the expansion of the Hotel Cheval Blanc in Courchevel is perfectly known and was conducted in accordance with the law and with legal support. The investigation, seemingly underway, will demonstrate these facts,” she said.

“Furthermore, who could seriously imagine that Bernard Arnault, who has developed over the past 40 years the leading French and European company, would pursue money laundering to expand a hotel? I believe the senseless nature of these allegations will be recognised by all.”

In recent weeks, speculation has ramped up over the future leadership of LVMH, which is owned by the Arnault family.

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