Bernard Arnault, the CEO of Louis Vuitton Möet Hennessy (LVMH) started to amass French rivals Hermes shares in 2002. In October 2010, it was announced that his stake in Hermes has risen up to 14 per cent. At present LVMH owns 22.6 per cent of shares in the rival luxury house.

The French Law says that any shareholder whose stake reaches the 5 per cent threshold, must make the information about his stake public. In 2010 when the announcement was made about LVMH’s business arrangements, it came as a shock to many. Legal proceedings began.

Arnault’s company acquired additional shares with the help of indirectly controlled subsidiaries in Luxembourg and Hong Kong. They entered into equity swaps with three French banks. The group could bet on the price of Hermes shares in the future without owning them and so in June of 2010, two of the French banks decided to settle.

Now France’s stock market regulator The Autorité des Marchés Financiers has ruled that LVMH could have disclosed its share ownership back then. The regulator has fined LVMH with 8 million Euros.

The company stated that it would take the matter to the Paris Court of Appeals. LVMH has also made a paper profit from its shareholding of about 2 billion Euros.