Bernard Arnault, the world’s second richest man and CEO of LVMH—one of Europe’s most valuable companies—is the subject of an investigation over financial transactions linked to Russian oligarch Nikolai Sarkisov.
An investigation into the matter was first opened in 2022, the prosecutors’ office said. But news about it was made public last week when French outlet Le Mondereported that authorities were probing Sarkisov’s purchase of a ski resort in the French Alps using a loan from Arnault. The report cited Tracfin, an anti-money laundering unit within the French economy ministry, which flagged the transaction as a suspicious financial transaction.
The start of an investigation doesn’t imply guilt for the parties involved, and no one has been charged yet.
Arnault’s lawyer has dismissed allegations of Arnault’s involvement in the fraudulent deal as “absurd and groundless.”
“The transaction that allowed for the expansion of the Hotel Cheval Blanc in Courchevel is perfectly known and was conducted in accordance with the law and with legal support,” Jacqueline Lafont, Arnault’s attorney, said in a statement to Fortune. “Furthermore, who could seriously imagine that Bernard Arnault, who has developed over the past 40 years the leading French and European company, would pursue money laundering to expand a hotel?”
Le Monde cited an unidentified associate of Arnault’s who said the deal was carried out within France’s legal confines.
Sarkisov owns the Russian insurance company RESO-Garantia along with his brother. The Moscow-based company is one of the most prominent insurance players in the country, and offers a wide range of coverage for individuals and legal entities.
RESO-Garantia’s spokesperson told the New York Timesthat Sarkisov had neither met nor was involved in the transaction under investigation.
“The transaction was managed by a small investment unit which invests professionally in European real estate,” RESO-Garantia spokesperson Igor Ivanov said in a statement, adding that some of those properties were based in Courchevel, where the ski resort purchased by Sarkisov is located.
“All transactions were carried out by French companies, through French notaries by French lawyers on all sides,” he said.
RESO-Garantia has also been under investigation by French authorities for a different case involving former French President Nicolas Sarkozy for “influence peddling” after he was hired on a roughly $3 million contract by the group as an advisor.
The prosecutor’s office could not be reached for further comment on the ongoing investigation. Tracfin didn’t immediately return Fortune’s request for comment.
LVMH’s footprint
French multi-billionaire-owned LVMH, which owns luxury brands including Louis Vuitton and Christian Dior, is among Europe’s largest companies by market capitalization. Arnault’s net worth is $167 billion, according to the Bloomberg Billionaire Index. The group made a revenue of €42.2 billion ($44.5 billion) in the first half of 2023, up 15% from the same period last year. In July, the company agreed to be a premium sponsor of the 2024 Summer Olympics in France, pumping millions of dollars into the sporting event.
The company has rapidly grown to become one of the key luxury companies in the world—which in some cases has also brought it under scrutiny.
Earlier this year, Arnault lost a case to French tax investigators regarding a raid of LVMH’s headquarters in 2019 relating to its operations in Belgium. The company said it was any tax discrepancy was likely a “procedural issue” under European Law and its activities were known to French authorities.