On 21 October, 1996, by way of a ministerial order, Compagnie Générale Maritime SA with a capital of 1,275,948,600 French Francs, was transferred to the private sector.
CMA purchased 90% of CGM shares for the sum of 18,000,000 French Francs, whereas Jacques Saadé benefited from 6% of the company’s shares in his own name. Consequently, 96% of all CGM shares were under his direct control.
Prior to its privatization, the French Government re-capitalized CGM with 1,275,000,000 French Francs.
On 4 September, 1997, Jacques Saadé announced to the press the transfer of all CGM shares owned by CMA to Merit France SA, his personal holding company, for a ridiculous low price between 18,000,000 and 30,000,000 French Francs.
CMA was then in extremely critical financial difficulty and the fact of depriving it of the gains realized by the purchase of CGM shares, worsened its situation.
This financial transaction set up by Jacques Saadé, under vague conditions, and the premeditated manipulation of accounting documents, transfer of funds, etc…, thus ensuring him control over CGM, and hence the funding made by the French Government on the eve of the privatization, was all realized to the detriment of CMA's creditors, employees and, above all, the direct shareholder Mistral (Holding) s.a.l.
Antoine Veil, a member of the Board of Directors of CGM, and husband of former Minister Simone Veil, faced and puzzled with Jacques Saadé's unusual financial set-ups, sent a letter to the latter on 6 May, 1997, questioning him on a loan agreement between CGM and CMA for an amount of 19.5 million US. Dollars in the latter’s favor. The lack of transparency in connection with this contract and a concern related to the ability of CMA to repay the loan, led Antoine Veil to hesitate, requesting time to think, without ultimately giving a positive reply.
It is interesting to note a typical example which illustrates certain doubtful set-ups which cannot but compel us to cast doubt as to their real purpose, as is the case of the « Pacific I, Pacific II, Pacific III et Pacific IV» companies.
On 3 July 1997, a few months before the merger of CMA and CGM, four general partnerships were registered with the Commercial Court in Suresnes, all of them bearing the name PACIFIC, followed by either I, II, III or IV.
These four companies, with the same share capital (10,000.00 French Francs) and domiciled at the registered office of CGM in Suresnes, had exactly the same company business, namely: purchase, sale, management and charter of vessels, and all related activities arising there from. Looking at the share capital distribution, we notice that it was distributed between CGM and CMA each owning 95% and 5% respectively in all four companies.
What was the point of establishing these "clone" companies between CGM and CMA, since three existing agreements already facilitated transfer of funds between them: a cash-flow agreement dated 19 February, 1997, a loan agreement dated 24 April, 1997 and a current account agreement dated 18 July, 1997, without any of these three agreements jeopardizing the validity of the others?
What was the advantage for CGM and CMA in having four intermediaries (among others) between them?
It seems that the only role of these “PACIFIC” companies was simply to deviate part of CGM funds to the benefit of a third party or to avoid fiscal inquiries over the final destination of those funds.
Is it just a coincidence that Jacques Saadé’s most faithful lieutenants were placed in key positions in these companies?
All this came within a well-organized framework: the more people are involved, the more their tracks are blurred .
Jacques Saadé first makes sure to gain the absolute majority within CMA by making Mistral (Holding) s.a.l. a minority shareholder with the objective of taking the total control of CGM. This embezzlement to the personal benefit of Jacques Saadé was premeditated even before the privatization was finalized. Everything suggests that Merit France s.a., created precisely on 1 October, 1996, and incorporated in Marseille on 3 October, was the structure intended to ensure sooner or later, Jacques Saadé’s personal control over CGM, and CMA was merely a springboard allowing him to achieve this objective.
Merit s.a.l. had already committed on 2 October to transfer the total number of shares it held in CMA (i.e: 299,997) to Merit France s.a. (one day before its incorporation inr the commercial registry of Marseille).The purpose was to highlight the French ownership of CMA instead of its initial Lebanese shareholding. The striking aspect of this transaction lies in Jacques Saadé’s signing for both parties. This was expected given that Jacques Saadé was in total control over both companies thus acting as the “assignor” and the “beneficiary”.
