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LVMH executive, former PM Balladur associates in court on arms-sale corruption charges

Nicolas Bazire (L),in April 1995 with then French prime minister and presidential candidate Edouard Balladur
Nicolas Bazire (L),in April 1995 with then French prime minister and presidential candidate Edouard Balladur Reuters/Charles Platiau/Files

A top executive of luxury group LVMH and other associates of former prime minister Edouard Balladur are to face trial in a French court over a long-running saga of alleged corruption linked to arms sales to Pakistan and Saudi Arabia. Some of the accused are close to ex-president Nicolas Sarkozy.


Nicolas Bazire, who is head of LVMH’s development and acquisitions arm as well as sitting on numerous other boards, including that of supermarket operator Carrefour, is to be tried along with five other people in connection with the “Karachi affair”, a case of alleged bribery and the illegal financing Balladur’s unsuccessful bid to become president in 1995.

His co-defendants are:

  • Thierry Gaubert, a collaborator of former president Nicolas Sarkozy, accused by his ex-wife of bringing cash of dubious origin to France;
  • Renaud Donnedieu de Vabres, who was culture minister under Sarkozy;
  • Franco-Lebanese businessman Ziad Takkedine, who has admitted depositing 0.2 million francs (about one million euros) in Balladur’s campaign account;
  • Abdul Rahman El-Assir, a Takkedine associate who lives in Switzerland and has not come to France during the inquiry;
  • Dominique Castellan, the former boss of international operations of France’s naval shipyards.

After a three-year investigation in several countries, judges Renaud van Ruymbeke and Roger Le Loire have concluded that 327 million euros were illegally amassed from the

Background reading: Previous French scandals

sale of submarines to Pakistan and frigates to Saudi Arabia.

The money is supposed to have been made from “retrocommissions”, a system of payments to supposed facilitators who would keep part of the money for themselves and pay back some in cash to be funnelled into the Balladur account or into individuals’ pockets.

Payments by what was known as the “K network” are believed to have travelled to France via Switzerland, Ireland, Liechtenstein, the British Virgin Islands, the Bahamas or the Cayman Islands.

After winning the 1995 election, Jacques Chirac ordered the K network to be closed down.

Sarkozy was spokesperson of the Balladur campaign.

A separate inquiry is under way to establish whether a 1996 bombing in Karachi, which killed 15 people, including 11 French engineers working on submarines in the city’s port, were ordered by Pakistani officials angry at not receiving payments.

Balladur and former defence minister François Léotard will not appear in court but may yet be summoned to appear before a special court authorised to judge ministers on crimes alleged to have been committed while they were in office.

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