Bloomberg News
PARIS - Axa SA chairman Claude Bebear and chief executive Henri de Castries were questioned by French police as part of a probe into possible money laundering by a former unit, the company said Wednesday.
The questioning Tuesday was by police investigating PanEuroLife, a Luxembourg insurer now owned by Nationwide Mutual Insurance Co. of Columbus, Ohio. Credit Lyonnais SA's Jean Peyrelevade was also questioned Tuesday as a witness in the same case, according to Axa spokesman Bertrand Hugonet.
Axa's shares fell 2.7% after the announcement. A Nationwide unit bought 90% of PanEuroLife from the Paris insurer and asset manager in 1998.
A finding of wrongdoing on the part of Axa management would be "a disaster,'' said Michael Wheelhouse, an analyst at Nomura International in London, who has a "buy" rating on the stock. "The market is saying, 'Let's mark the shares down in case there is something wrong.' However, I would be surprised if this sticks,'' he said. "Axa has built up a solid reputation.''
Mr. de Castries, 46, joined Axa in 1989 as a director in the finance department. Less than two years later he became head of worldwide asset management, overseeing about $700 billion.
The Basque native helped Mr. Bebear negotiate the takeover of UAP SA, France's largest insurer, in 1996. Last May he succeeded 65-year-old Mr. Bebear as chief executive.
PanEuroLife may have held or laundered tens of millions of dollars for small and midsize French companies since 1992, the Journal du Dimanche reported in April.
Agence France Presse first said that the two Axa executives were in custody Wednesday. Axa spokesman Christophe Dufraux refused to comment on that report, and French police would not confirm it.
Credit Lyonnais' Mr. Peyrelevade was not in custody, Mr. Hugonet said. He was questioned because, before joining the bank, he headed UAP, which is now part of Axa.
The 10% of PanEuroLife not owned by Nationwide is held by Banque Internationale a Luxembourg SA, a unit of Dexia SA.
Axa Financial Inc., Axa's U.S. unit, is headed by Christopher M. "Kip" Condron, a former president of Mellon Financial Corp. of Pittsburgh. Mr. Condron was chosen last month to succeed Edward D. Miller, who moved to Axa Group's supervisory board.
