Paris: France’s largest telecommunications operator Orange said on Wednesday it would find a successor to its chairman and CEO Stéphane Richard by January 31 after a Paris appeals court convicted him of misappropriation of public funds.
Richard’s sentence is a major blow to the former high-ranking civil servant, who has always denied any wrongdoing. The court’s decision, which sentenced him to one year in suspended prison, is accelerating his departure from the group he has led for the past 11 years.
Richard’s resignation was accepted by the Board of Directors at a meeting that ended at around 1900 GMT.
The company said he would continue in the position on an interim basis while the company is looking for a replacement. It was unclear whether the group intended to separate the roles of chairman and CEO.
Richard has previously said that it is up to the board to keep its job or not. He called the court’s decision “deeply unfair” and said he would appeal.
French Finance Minister Bruno Le Maire has repeatedly stated that the government’s position is that owners of state-owned companies should step down if convicted of a crime.
The French state holds a combined 23% stake in the former monopoly and the government has so far intended to separate the roles of CEO and chairman.
Richard’s current term formally ends in May 2022. He has already said that he will not seek to stay on as CEO, but that he is willing to remain chairman.
Earlier on Wednesday, Richard, who also received a fine of 50,000 euros but was cleared of the charge of fraudulent collusion, hastily left the court with Orange’s communications chief Beatrice Mandine.
The case pertains to a French state payment of 400 million euros ($450 million) to the late tycoon Bernard Tapie in 2008. Tappy accused the government of defrauding him when he sold a stake in sportswear conglomerate Adidas to a state-backed bank in 1992.
At the time of the 2008 agreement, Richard was Chief of Staff to the then French Finance Minister Christine Lagarde, who is now President of the European Central Bank. Lagarde, who also denied wrongdoing, was convicted of negligence in the case in December 2016.
Judge Sophie Clement said Richard “committed serious acts favoring the interests of Bernard Tapie at the expense of the people of the state.”
Richard is credited with maintaining good relations between employees and executives at Orange early in his tenure, when the company was reeling from a wave of employee suicides.
He helped boost its financial results in 2012 following the arrival of rival Iliad’s low-cost brand Free, which started a protracted battle in the mobile business, and the launch of a new online banking service.
However, Orange’s stock price has not improved during Richard’s tenure. Its shares, which traded at around 11 euros when he first became CEO, have gone down drastically after the court’s decision to just under 10 euros.
(Additional reporting by Gwynelle Barzik, Writing by Sylvia Alosi; Editing by Elaine Hardcastle and Chizu Nomiyama)
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