Arrests in L'Oréal case take Sarkozy out of the spotlight

(REUTERS)

French investigators yesterday arrested four leading figures in the L'Oréal family feud scandal, including the celebrity photographer who is accused of obtaining almost €1bn from France's richest woman.

Francois-Marie Banier, 63, a friend to stars from Salvador Dali to Johnny Depp, will spend at least two nights in jail facing questions about suspected tax evasion.

Police have also arrested Patrice de Maistre, 61, the aristocratic manager of the personal fortune of Liliane Bettencourt, 87, L'Oréal's largest shareholder. The other detainees are Fabrice Goguel – Ms Bettencourt's former tax lawyer – and Carlos Vejarano, the manager of an exclusive island in the Seychelles whose ownership is suspected of becoming a €500m pawn in a fiscal chess game. After exploding in the last three weeks into a political scandal – still unresolved – the affair has abruptly reverted to its origins – a mother and daughter feud which has generated allegations of the abuse of a befuddled old woman and suspicions of tax evasion on a heroic scale.

All yesterday's arrests flow from 100 hours of conversations in Ms Bettencourt's home between April 2009 and May this year, which were secretly taped by her former butler and handed to investigators.

Police are expected to question the four men over passages in the tapes which appear to discuss schemes to hide parts of Ms Bettencourt's €14bn fortune abroad. The taped conversations also refer to convoluted shifts in the off-shore ownership of the island of Arros in the Seychelles, which once belonged to Ms Bettencourt, but has been transferred – without her recollection – to the control of Mr Banier.

"I wanted to give him an island?" the puzzled heiress is heard to ask Mr de Maistre.

Even before yesterday's arrests, the Bettencourt saga had entered a potentially explosive new stage. Both Ms Bettencourt and her estranged only child, Françoise Bettencourt Meyers, 57, have taken steps which expose a hitherto submerged aspect of the affair: the struggle for the control of L'Oréal, the world's largest cosmetics firm.

Ms Bettencourt's friend, Mr Banier, faces a charge of "abuse of weakness" for taking "presents" worth almost €1bn in cash, paintings and assets from the billionairess. His trial was adjourned two weeks ago to allow the judge to study the secret recordings.

On Wednesday, Ms Bettencourt's daughter announced that she could not wait for the outcome of the trial. On the evidence of the secret conversations, her lawyer said, there was an urgent need to have Ms Bettencourt declared mentally incapable of running her own affairs. This would potentially transfer her controlling votes in L'Oréal to her daughter and son-in-law.

Ms Bettencourt issued a retaliatory statement accusing her daughter of "an ignoble persecution". The billionairess implied that her daughter was in a hurry to take control of L'Oréal as she wanted to sell the company to the second biggest share-holder, Swiss multi-national Nestlé.

Ms Bettencourt also announced that she had ordered an "audit" of all her family companies and trusts to prove that her finances were in good order. The statement exploded in her face almost immediately.

The billionairess announced that the checks would be conducted, not by an independent auditor, but by her own financial manager, Mr de Maistre. Since the leaking of transcripts of the "butler's tapes" last month, Mr de Maistre's own role in the affair has been plunged into doubt. He is heard on the tapes trying to wheedle a large sum of cash from Ms Bettencourt to buy himself the "yacht of my dreams". He was also one of the four men arrested.

The "butler's tapes" also detonated a political scandal. They suggested that President Nicolas Sarkozy had intervened to try to stop the prosecution of Mr Banier. They also suggested that Mr Sarkozy's party treasurer, Eric Woerth, had solicited funds from Ms Bettencourt – and a job for his wife – while he was also budget minister and running a campaign against large-scale tax evaders.

President Sarkozy attempted to bury the political scandal in a TV interview on Tuesday night in which he described all allegations against himself and Mr Woerth as "calumnies". Polls suggest that more than 50 per cent of French voters were not convinced by his performance.