Meanwhile, Vivendi's top lenders, including Deutsche Bank and BNP Paribas, also were unwilling to provide any new financing amid the boardroom turmoil, according to banking and company sources.
"The banks just didn't trust Messier, and they were not confident that he had the right strategy," said one European banker close to Vivendi. "They were just not prepared to lend fresh money for his business."
A spokesman for Deutsche Bank declined to comment. Officials at BNP Paribas couldn't immediately be reached. But Messier, sources close to him say, contends that he wasn't aware of this situation until after he had issued his statements on June 26.
Simon Murray, a private equity investor based in Hong Kong and a former Vivendi board member whose tenure as a director overlapped with Messier's, says he is convinced that Messier was truly in the dark about the banks' actions.
"I don't think Messier was aware that the banks were going to pull the plug," Murray said.
The final blow came on July 1 when Moody's Investor Service downgraded Vivendi to "junk" status, questioning its ability to reduce debt as planned.
The timing could work in Messier's favor, said Bebel, the securities law specialist: "If the company's financial status declined markedly in the wake of his statement, it makes it a tougher case for the government."
Authorities also are investigating allegations that Messier concealed from board members and Hannezo about $6 billion in purchases of Vivendi stock that he oversaw in 2000 and 2001.
Metzner, Messier's attorney, counters that the board was fully apprised of his client's actions, noting that the purchases were part of a plan formally adopted by shareholders in 2000. The plan outlined specific goals, including buying back shares to stabilize their price and for use in acquisitions and employee stock options.
In December 2000, the board gave Messier the specific authority to carry out that plan. In June 2001, Messier and Hannezo updated the board on the progress of the share buybacks, records show. The company also filed monthly reports of its share purchases with France's stock market regulator, Metzner said.
"The board of directors cannot argue that they were unaware of Messier's actions," Metzner said.
Murray, the former director, agrees. Messier can be criticized for "his enthusiasm, his ego and for growing the company too fast," Murray said, "but not on grounds of misleading the board."
