By Emmanuel Jarry and Inti Landauro
PARIS (Reuters) - France seized part of a severance payment to the former co-chairman of LafargeHolcim as part of an investigation into whether the cement maker paid off Islamic State and other militants in Syria, said a source close to the case.
Bruno Lafont received an 8 million euro package in 2015 when leaving Lafarge after the company was taken over by Swiss rival Holcim (SIX:LHN), the source said on Monday. He remained co-chairman of the merged company until 2017 when he retired.
Investigative magistrates seized about 2.475 million euros over the summer, according to public radio station France Inter.
Authorities are investigating how, before the takeover, Lafarge kept its plant in the city of Jalabiya in northern Syria running when the area was controlled by Islamic State. The group has since lost the cities and towns it held in Syria and Iraq.
Prosecutors opened an investigation into suspected funding of terrorism in June 2017. They are looking into payments possibly made by Lafarge through intermediaries to armed groups, including Islamic State, and into possible purchases of raw materials from intermediaries related to these groups.
Prosecutors estimate Lafarge may have paid about 13 million euros to militant groups.
A spokesman for LafargeHolcim and a lawyer for Lafont did not return calls seeking comment.
The case prompted Eric Olsen, the first CEO after the merger, to step down and it remains a headache for LafargeHolcim, which has struggled to make the merger work and is cutting costs under the leadership of a new chief executive.
Non-profit organization Sherpa brought the case to French tribunals on behalf of 14 former Syrian employees at Lafarge.
"The victims will be reassured they would get reparation at the end of the process," a Sherpa representative told Reuters.
Seven former Lafarge executives aside from Lafont are under formal investigation including Olsen. He has denied wrongdoing.
Prosecutors also seized funds from two former managers in Jalabiya, Bruno Pescheux et Frederic Jolibois, as well as the former deputy general operating manager Christian Herrault.
The total amount seized is equivalent to 3.7 million euros, according to France Inter.
"This is appalling. It is a violation of presumption of innocence. It is inadmissible," Herrault's lawyer Solange Doumic told Reuters. She said all four had appealed the decision.
Jolibois's lawyer confirmed that funds were seized from him. It was not immediately possible to reach a lawyer for Pescheux.
Magistrates did not seize funds from the four others it is investigating.
French authorities are also investigating Lafarge for financing terrorism and complicity to crime against humanity.
Sherpa said it hoped the investigation on crime against humanity will be extended to the company executives.