Europe’s richest man Bernard Arnault in money laundering investigation

The world’s second richest man, Bernard Arnault, is at the center of an alleged money laundering scandal.

Paris prosecutors are investigating financial transactions between the head of luxury goods giant LVMH and a Russian billionaire, Nikolai Sarkisov, whose brother Sergey founded one of Russia’s largest insurance companies Reso-Garantia.

The investigation concerns their activities in Courchevel, an exclusive ski resort in the French Alps that was known before the war in Ukraine as a playground for the super-rich, particularly rich Russians.

Sarkisov, 55, reportedly acquired more than a dozen properties in the luxury Alpine hotspot in 2018 through a complex deal in which Arnault allegedly provided a loan through one of his companies.

According to reports in Le Monde newspaper, Arnault’s loan was worth an estimated £16 million and the agreement – which involved companies based in France, Luxembourg and Cyprus – allowed the Russian oligarch to pocket a profit of around £1 million.

In view: Nikolai Sarkisov (top left) and Bernard Arnault (with his wife Helene Mercier)

The 74-year-old Arnault, founder, chief executive and chairman of LVMH, owner of Louis Vuitton and Moet Hennessy, has earned the nickname “Wolf in Kashmir” over his decades at the helm and is worth an estimated £134 billion, according to the Bloomberg Billionaires Index .

He and his family own 41 percent of the group, whose luxury brands also include jeweler Tiffany’s and watchmaker Tag Heuer.

But the Frenchman appears to have run into trouble when an unidentified official from the French Finance Ministry’s Tracfin financial intelligence unit told Le Monde that the deal with Sarkisov could be aimed at concealing the origin of the funds used for the property.

The Paris prosecutor’s office said a preliminary investigation was opened last year and confirmed to Reuters that transactions between Arnault and Sarkisov were part of the probe.

Arnault is said to have a special connection to Courchevel, having learned to ski there as a child. Meanwhile, Sarkisov’s wife, Ilona Kotelyukh, has described Courchevel as “my oasis,” according to reports in the Times last year.

A spokesman for Reso-Garantia said: “The transaction was managed by a small investment unit that invests professionally in European real estate.” This involved the acquisition of apartments in an old building in Courchevel from various private owners with the intention of selling them later sold to a developer after buying the entire building. All transactions were carried out by French companies, through French notaries and by French lawyers on all sides. “It was a standard real estate deal.”

LVMH could not be reached for comment, but Le Monde quoted a close contact of Arnault as saying the deal was carried out within the framework of French law.

But the investigation is undoubtedly a blow to Arnault, who lost a Supreme Court case in February against French tax investigators over the legality of a 2019 raid on LVMH headquarters. The raid was related to a tax fraud investigation related to activities in Belgium.