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Alcatel board backs Suard

Thomas Blard
Monday 13 March 1995 19:02 EST
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BY MARTIN FLANAGAN

and THOMAS BLARD

Confusion swept the French stock market yesterday when shares in Alcatel Alsthom, the electrical giant, came back from suspension after the group's management firmly endorsed Pierre Suard, its suspended chairman.

Shares in the group, France's second biggest industrial combine, fell Fr9 to Fr385 from their Friday close of Fr394.70 when trading in the shares re-opened in mid-afternoon.

The group's shares hit a low of Fr379, before recovering a little to Fr387.50 - down Fr7.20.

The gyrations in the shares, traded on the CAC-40 index, followed a statement by directors reiterating their confidence in Mr Suard, chairman and chief executive of Alcatel.

On Friday a judge banned Mr Suard, 60, from running any company. His lawyers yesterday confirmed that they had launched an appeal against the ruling in the Paris appeal court.

Mr Suard, one of France's most powerful, well connected businessmen and an ally of the conservative Prime Minister, Edouard Balladur, was placed under investigation on Friday night and barred from meeting anyone involved in the alleged overcharging of the state-owned France Telecom.

This included fellow directors and staff of his own company, itself state- owned until 1987, and which now has annual sales of £20bn.

Yesterday Alcatel's board, which called for the share suspension, issued a statement saying it had met under Ambroise Roux, its honourary chairman.

The Alcatel board said it noted the legal restraint on Mr Suard temporarily blocked him from carrying out any of his normal business functions. "The board is deeply concerned about the severity of this action for the chairman of one of the world's largest industrial corporations," the directors said.

They also renewed publicly their confidence and support for Mr Suard.

The developments at Alcatel have fired the imagination of many of the most powerful French politicians and industrialists, largely because of the leading protagonist's influential connections.

Fresh impetus was given to the controversy on the weekend when Francois de Laage de Meux, Alcatel's managing director, claimed he had been told by a reputable British company last November that the French group was the victim of industrial espionage.

Some French observers believe there may also be a political dimension to the timing of the allegations due to Mr Suard's close associations with Mr Balladur - who is running in the increasingly dirty and controversial election campaign for the French presidency.

Among Alcatel's myriad activities is the GEC Alsthom turbine venture, which it owns with Britain's GEC.

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