A French court has ordered the seizure of assets belonging to the president of the International Stadiums Poker Tour (ISPT), Bernard Tapie, amounting to hundreds of millions of euros in a fraud case involving former president Nicolas Sarkozy.
Tapie, 70, and three other people, including a senior retired judge, have been formally accused of “conspiracy to defraud” the French state in the latest twist in the 'Tapie-Sarkozy scandal' - the alleged fixing by Sarkozy and his staff of a supposedly independent €405 million arbitration in Tapie's favour in 2008.
According to newspapers, the property seizures were standard procedure to prevent the tycoon from selling assets during the investigation. The tycoon retains ownership of the assets and, in the case of properties, can continue to use them.
Newspaper Le Monde reported that among the assets are life-insurance policies worth €20.7 million, shares worth €69.3 million in a Paris mansion and a villa in Saint Tropez worth €48 million.
Taipie is well known in the poker world as the creator of the ISPT which took place in June at London’s Wembley Stadium.
The tour originally had the lofty goal of getting 30,000 poker players to compete in a tournament in the landmark stadium but faced a rocky road as the prize pool guarantees had to be slashed, the format changed, and satellite events cancelled all because of a lack of interest.
In the end, only 761 participants turned up to the inaugural ISPT, won by Polish poker player Jakub Michalak, which equated to a €589,000 loss for the organisers.
And that’s not the first time Taipie has had to scale back his poker ambitions. His company, Groupe Bernard Tapie at one point came close to buying Full Tilt Poker. It looked like finalization of the deal was imminent in early 2012, but the deal fell apart, eventually leading to Full Tilt’s purchase by rival PokerStars.
His current legal troubles date back to 1992, when Tapie became Minister of Urban Affairs under President Francois Mitterand. That role required him to sell his interests in the sporting goods company Adidas, which he did under the mandate of state-owned bank Credit Lyonnais in 1993 for €315.5 million. The buyer was a group of investors led by Robert-Louis Dreyfus and included a subsidiary of Credit Lyonnais, which ended up owning about one-fifth of Adidas.
The bank had been struggling, resulting in the government taking partial control of it in 1994 and selling its liabilities. At the end of that year, Dreyfus bought all shares of Adidas for €701 million, significantly more than what the company was sold for in 1993. All the while, the commercial court of Paris was liquidating Tapie's companies.
In 1995, Tapie’s liquidators discovered that after Credit Lyonnais had undertaken the mandate to sell Adidas, it researched the market and determined that Adidas was worth well more than Tapie’s target price. Thus, Credit Lyonnais entered into a secret agreement with Dreyfus to sell him 100% of the company for twice what it was about to sell for under the mandate. Essentially, through financial wrangling, the bank bought Adidas from Tapie for the bare minimum, knowing it was going to flip it for a substantial profit.
In 1996, Tapie’s liquidators sued Credit Lyonnais and were awarded €91.5 million, but that decision was annulled in 1998. At that point, Tapie requested ten times that much in damages. The case went on for a decade when finally in 2005, the court of appeal awarded Tapie €135 million, but that judgment was also annulled.
In 2007 Tapie and his liquidators offered to enter into private arbitration to settle the dispute with the state-owned. Credit Lyonnais – an unusual move since arbitration normally involves commercial entities. Nevertheless, France’s Minister of Economic Affairs, Christine Lagarde, currently the Managing Director of the International Monetary Fund, permitted arbitration. The arbitration court awarded Tapie €285 million in 2008, which grew to €403 million once interest was added on.
Lagarde has since been accused of unfairly favouring Tapie because he was a strong supporter of ex-President Nicolas Sarkozy, under whom Lagarde served. Authorities believe Tapie was granted arbitration by Lagarde in exchange for supporting Sarkozy.
Tapei denies any wrongdoing.
