Paul Desmarais Jr. has invested around the world for decades, but there’s one country he shies away from: Russia.
Mr. Desmarais disclosed his aversion to Russia while under questioning by Belgian police last December as part of their investigation into allegations of terrorist financing at cement giant LafargeHolcim. Mr. Desmarais is a long-time Lafarge director and a major shareholder through a Belgian company called Groupe Bruxelles Lambert, or GBL, which his family co-owns.
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The subject of Russia came up when the police asked him about how GBL assesses the risks of investing in unstable countries. He said he couldn’t respond in a general way but he did offer an example. Citing GBL’s holding in French energy company Total SA, he said in French: “For example, at Total, I am always worried about our investments in Russia because I have had, personally, with another company, a bad experience.”
He explained that he once held an interest in a Russian vodka bottling plant through Sagard Holdings, the investment arm of Montreal-based Power Corp., which is controlled by the Desmarais family. One day officials at Sagard’s European division noticed some inconsistencies with the plant’s revenues and sent a young technician to investigate. The Sagard representative quickly discovered that the local mayor and a plant manager had been stealing pallets of bottles. Shortly after the technician reported his findings back to Sagard and Power, Mr. Desmarais said the young man ended up with a bullet in his head, which left him in a coma.
The boss of Sagard Europe, which is based in Paris, asked Mr. Desmarais if he wanted to “engage someone from the French secret service” to find out who shot the man. “I responded that I certainly didn’t want to do that,” Mr. Desmarais told police. He ordered Sagard to close the plant and get the young technician, as well as Sagard’s local managers, out of Russia and back to Paris. His final instruction: “Do not set foot there again.”
Paul Waldie