To reassure the markets, alarmed by the case as much as by the heavy debt of the group, the businessman took advantage of a conference of analysts to explain that he felt "betrayed and deceived by a small group of individuals", after the arrest in Portugal of his right-hand man and co-founder of Altice, Armando Pereira.

The latter was arrested in Lisbon on 13 July and indicted as part of an investigation for corruption and money laundering.

The owner and boss of Altice, who rarely speaks in public, had never yet spoken out on this case that splashes the entire group.

"We immediately suspended about fifteen people in Portugal, France and the United States," following an internal investigation, announced Patrick Drahi, promising to make "all transparency" on this case

"It is very unpleasant to see the word corruption next to the name of our group and most of the time, in the press, next to my name, but our group is a victim and not accused," added the boss of this telecoms empire, present mainly in Europe and the United States and which employs a total of nearly 100,000 people.

Patrick Drahi explained that the judicial investigation, which concerns purchases of the group, targeted only Portugal but acknowledged that "Altice entities outside Portugal have done business with some of the suppliers identified by the Portuguese authorities".

"But this case concerns only a very small part of our overall purchases," less than 5%, he argued.

Another argument is the role of Armando Pereira: he was only "responsible for technical supplies", without being involved in "the operations of any of the entities of Altice International", parent company of Altice Portugal.

Patrick Drahi, who turns 60 on August 20, also assured that this scandal would have "no impact" on the finances of his branch Altice International, whose results were presented Monday.

Worried markets

"Some individuals, especially in the purchasing branch, have carefully concealed their actions vis-à-vis me, their colleagues and the entire group," defended the French-Israeli billionaire.

"We are conducting extensive international investigations (...) to conduct an independent review," he said.

Patrick Drahi at the inauguration of Altice Campus in Paris on October 9, 2018 © ERIC PIERMONT / AFP/Archives

In particular, the group suspended Tatiana Agova-Bregou, the executive director of content, acquisitions and partnerships, implicated in wiretapping of the Portuguese justice, as well as Alexandre Fonseca, co-CEO of Altice, former executive chairman of Altice Portugal. Yossi Benchetrit, head of purchasing in the United States and son-in-law of Armando Pereira, has been fired.

This case comes at the worst time for the group, whose overall debt of nearly 60 billion euros worries in times of rising rates.

The intervention of the businessman may not be enough to reassure investors.

On Wall Street, Altice USA shares - the group's only listed entity - fell 7% after his speech. On the other hand, the interest rate on Altice France's January 2025 bond rose from 8.66% before the analyst conference to 6.79% shortly after its intervention, a positive sign.

"No surprise: he could hardly say anything else," Lionel Melka, a partner at Swann Capital, told AFP.

"At best, it's a huge governance deficiency, at worst, organized fraud. The only thing that can calm the worries is that cash rises through asset sales, "said the analyst, recalling that the group is in the process of selling its pylons and data center. "The market will want more," he said.

"Even in the absence of the suspected fraud, the situation is very tense due to the rise in rates, even if the group does not have big deadlines right away. But the case can lead to a loss of confidence of creditors and precipitate the fall," he said.

Altice is due to present on Tuesday the results of its Altice branch France, parent company of SFR, indebted to the tune of about 23 billion euros. In addition to telecoms, Altice is also present in the media, where it owns in France including RMC and BFMTV.

© 2023 AFP