An Hermès heir accuses LVMH of defrauding him out of several billion euros A lawsuit driven by a secret agreement
It is a storyline worthy of an espionage novel, reframing the rivalry between France’s two biggest luxury giants. Nicolas Puech, one of the main heirs to the Hermès fashion house, accuses the LVMH group and its CEO Bernard Arnault of orchestrating the theft of his shares without his knowledge. The estimated damages are staggering: a mind-boggling €14 billion. To make sense of this complex affair, one must trace back a financial arrangement crafted in utmost secrecy.
The trusted advisor turned key intermediary
At the center of the plot is Éric Freymond, the Swiss wealth manager to whom Nicolas Puech had entrusted the complete management of his estate. According to legal documents reviewed by Reuters, Mr. Freymond entered into a confidential agreement with LVMH representatives as early as 2002. The goal was to gradually buy up the Hermès shares held by Nicolas Puech.
To coordinate this discreet transfer, Bernard Arnault's family holding company and LVMH paid at least $20 million (around €17.4 million) in commissions and fees to Éric Freymond's management company between 2001 and 2009. Shortly before his suicide last summer, Éric Freymond reportedly admitted to French judges that he had sold a massive block of 4.8 million Hermès shares belonging to Nicolas Puech to LVMH in 2008, following a series of smaller transactions, as revealed by Le Canard Enchaîné.
The shadow of a historic corporate raid
This case sheds new light on the operation that rocked the business world in October 2010. To everyone's surprise, Bernard Arnault revealed at the time that LVMH had secretly accumulated a 17% stake in its competitor Hermès—a stake later increased to 23%.
At the time, the Hermès family decried a "hostile raid" and rallied to lock down its capital to safeguard the company's independence. The feud ended in 2014 with a court-sanctioned agreement forcing LVMH to relinquish and redistribute its shares. Yet one question remained unanswered: how had LVMH managed to build up such a massive holding without being detected? These recent revelations offer a first glimpse of an answer.
LVMH's line of defense
@bernardgarby The Battle Between Hermès Heir and LVMH! #tiktokfashion #fashion #lvmh #hermes original sound - BERNARD
In response to these allegations, the luxury giant flatly denies any wrongdoing. On one side, Nicolas Puech denounces a fraudulent scheme orchestrated by LVMH with the complicity of his wealth manager and an attorney, Alexandre Montavon. He is claiming €14 billion in compensation.
On the other side, LVMH defends itself by stating that while the group was indeed looking to acquire Hermès shares on the market, it had no idea the purchased stock belonged to a direct heir. LVMH maintains that these acquisitions occurred without its knowledge. Furthermore, no criminal charges have been sought to date against the Swiss intermediaries.
While LVMH pleads good faith—asserting it never sought to strip a member of the Hermès family of his assets—the millions of dollars in commissions paid to the heir's former advisor continue to fuel doubts about what really went on behind the scenes of this financial battle. To be continued in the next chapter.