By Sam Schechner
PARIS--France Telecom's (FTE.FR) board said Monday it has "full
confidence" in Chief Executive Stephane Richard, the company said
in a statement, just days after French authorities put Mr. Richard
under formal investigation for allegedly participating in a
conspiracy to commit fraud five years ago.
The move lifts a big question-mark that has been hanging over
the company since the disclosure of the preliminary charges against
Mr. Richard last week. Prosecutors are looking into the role Mr.
Richard played in a controversial arbitration hearing when Mr.
Richard was an official in the French finance ministry.
A lawyer for Mr. Richard, Jean-Etienne Giamarchi, said last week
that the charges "have no serious legal basis," adding that they
are "grotesque and defamatory."
France Telecom also said appointed an independent board member
to monitor the situation and ensure the inquiry isn't affecting Mr.
Richard's ability to carry out his duties.
"The board decided that the legal action facing Mr. Richard
doesn't put into question his ability to fully and effectively
fulfill his role as CEO, and will continue to make sure that is the
case in the future," France Telecom said in a statement.
The board decision comes less than a day after French President
Francois Hollande said the government--which owns 27% of France
Telecom--would support the chief executive, and instruct its three
representatives to vote for him to keep his job. "As long as Mr.
Richard can lead this company without consequences from the
judicial procedure, he will stay," Mr. Hollande said in a televised
interview Sunday evening with French channel M6.
Mr. Hollande said his main concern was to prevent the company,
which employs 170,000 people, from being affected by the
investigation into Mr. Richard.
Write to Sam Schechner at sam.schechner@wsj.com
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