(Bloomberg) --
Italian prosecutors indicted French billionaire and former Vivendi SA chairman Vincent Bollore in a case involving a dispute with Mediaset SpA, the broadcaster owned by former Prime Minister Silvio Berlusconi, the national finance police said.
Prosecutors allege Bollore engaged in market manipulation, intentionally driving down Mediaset's share price and obstructing the work of market regulator Consob, according to a statement on Saturday. Vivendi denied wrongdoing in a statement. A Mediaset spokesman declined to comment.
Vivendi said its current and former executives are “either extraneous to those allegations or have acted in full compliance with the law.”
The two companies have been at loggerheads since July 2016, when the French media conglomerate scrapped a plan to buy the Mediaset Premium pay-television unit in a share swap valued at about 893 million euros ($1.08 billion). Vivendi Chief Executive Officer Arnaud De Puyfontaine was charged, too. Mediaset has sought billions of euros in damages from Vivendi for abandoning the deal.
Investigations in Italy don't imply guilt and don't necessarily mean charges will be upheld. Prosecutors are now expected to ask a judge to send Bollore and De Puyfontaine to trial.
Read More: Vivendi, Mediaset Intensify Legal Scrap With Dueling Accusations
A few months after Vivendi scrapped the Mediaset Premium bid it bought an almost 30% stake in Mediaset in an attempted takeover. Vivendi also owns a 24% stake in Italy's largest phone carrier, Telecom Italia SpA.
Starting from early 2016, Bollore and De Puyfontaine gave the green light to “significant purchases of Mediaset shares with the aim of gaining control of the Italian broadcaster,” without informing Italy's market regulator Consob, according to a document from the Milan court seen by Bloomberg.
Vivendi said in its statement that it bought its stake in Mediaset in compliance with all applicable laws, reporting all share purchases “in a timely and transparent manner.”
During that year, Vivendi also caused a decline in Mediaset shares by spreading false information about the scrapped pay-TV deal, the document said. The two French executives also considered involving Telecom Italia SpA in a plan to build a media holding company with Vivendi and Mediaset as the main shareholders, also without informing Consob, the document said.
Read More: Vivendi to Lift Stake in Mediaset in Challenge to Berlusconi (3)
Separately, Milan prosecutors also charged Bollore of previously manipulating shares of another company, Premafin, that in 2014 was merged with insurer Unipol Assicurazioni and Milano Assicurazioni to later become UnipolSai Assicurazioni SpA.
Last September, Vivendi won a court fight to keep its stakes in both Mediaset and Telecom Italia, after European Union judges delivered a blow to Italian rules curbing the power of media moguls. The Court of Justice said the media concentration legislation violates EU law The Italian rules aim to prevent tycoons from taking control of several media and telecommunications companies.
Vivendi filed a complaint at the European Commission against Italy over a law that would delay the company's ability to exercise its full voting rights in Mediaset, according to people familiar with the matter.
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