The French market authority has fined Rallye, the parent company of supermarket group Casino, 25 million euros for covering up the extent of its financial problems.
Key moment
Casino has amassed almost 6.5 billion euros in debts and faces an important decision: who will take over the ailing supermarket chain : a French trio of entrepreneurs around telecoms mogul Xavier Niel or Czech billionaire Daniel Kretinsky and his business partner?
As shareholders and creditors weigh the options, parent company Rallye is hit by another financial setback. It faces a huge fine for disseminating misleading financial information. Apart from a penalty amounting to 25 million euros for the group as a whole, CEO Franck Hattab will also have to pay 2.5 million euros out of his own pocket.
Liquidity and loans
French market regulator AMF notes that Casino falsely claimed to still have a solid liquidity position in the period between March 2018 and May 2019. In reality, the company had 400 to 600 million euros less liquid assets than it let on. The parent holding company also concealed half a billion euros in additional loans, which had to be repaid immediately if any Casino shops closed.
As part of the investigation, founder Jean-Charles Naouri was taken into custody for questioning. However, it could not be proved that he deliberately manipulated the share price by bribing a stock market analyst.
