Explained: Why is France’s environment minister facing a probe over shares?

France's environment minister is facing an investigation into alleged conflicts relating to the fossil fuel industry and tax havens over shares owned by her children.

Explained: Why is France's environment minister facing a probe over shares?
France's Minister for Energy Transition Agnes Pannier-Runacher speaks to the press at the Eqiom cement plant in Lumbres, northern France (Photo by FRANCOIS LO PRESTI / AFP)

France’s Environment Minister, Agnès Pannier-Runacher, is under fire for having potentially failed to disclose conflicts of interest, after the release of an investigation by the online medias Disclose and Investigate Europe. 

The investigation centres on Pannier-Runacher’s three children (aged 19, 16 and 11) who all hold shares in a company created by their grandfather, Jean-Michel Runacher, the former director of oil and gas company, Perenco.

The company, Arjunem, was set up as an early-inheritance scheme by Runacher. The minister’s three children have held their shares since 2016, at which time they were all minors, meaning that Pannier-Runacher had to sign on their behalf. The company’s capital, which amounts to over €1 million, is linked to three investment funds, two of which are operated in tax havens or low-tax regimes in Guernsey and Ireland. 

There are two potential areas of concern;

The first alleged transgression lies in the fact that Pannier-Runacher did not disclose her children’s shares in the company to the High Authority for the Transparency of Public Life (HATVP), the French government watchdog for conflict of interest. The minister says that she did not breach any disclosure rules, as the law requires only that she disclose her own holdings and those of her spouse, not those of her children.

The second is the possibility that Arjunem could have investments linked to oil and gas, as the three hedge fund firms “have fossil fuel-linked investments in their portfolios,” according to Investigate Europe. As environment minister, Pannier-Runacher has been tasked with aiding the country in moving away from dependence on fossil fuels. 

However, as of November 8th, there was no evidence that Arjunem specifically had any investments in oil and gas.

Pannier-Runacher has called allegations “false and slanderous”.

She told Disclose that the company “is not my inheritance, but that of my children” and added that her children “have no power to manage the company to date.” The minister explained that is her father alone who manages Arjunem and its investments – meaning Jean-Michel Runacher has “full control of [the investments] and can keep dividends”, according to Investigate Europe.

The response to the investigation has been swift by French politicians, particularly those on the left who have slammed the environment minister. Fabien Roussel, the head of the French Communist Party commented that “the difference between tax optimisation and tax evasion is the thickness of a prison wall.”

Another left-wing politician, MP Clémence Guetté from the hard-left La France Insoumise (LFI) doubted Pannier-Runacher’s ability to “push forward renewable energies” if she has “indirect financial interests that are visibly linked to oil companies,” according to Franceinfo. 

On Tuesday, the HATVP announced it would be opening its own investigation following the report by Investigate Europe and Disclose. 

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French ex-minister convicted in fake jobs scam

A French court on Thursday found former justice minister Michel Mercier guilty of embezzlement in a fake jobs scheme he ran for the benefit of family members.

French ex-minister convicted in fake jobs scam

Mercier, 75, who served under former president Nicolas Sarkozy between 2010 and 2012, claimed tens of thousands of euros for his wife and daughter for parliamentary jobs  they never carried out.

The court handed him a suspended prison sentence of three years.

Mercier gave “personal gain precedence over the public good”, the court said in its verdict, calling Mercier’s actions “serious”.

As senator, Mercier claimed 50,000 euros ($54,000 at today’s rate) in salary for his wife Joelle between 2005 and 2009, and  €37,000 for his daughter Delphine between 2012 and 2014.

During that time, Delphine Mercier was living in London and did not set foot in the French Senate, but her father claimed she was acting as his “cultural advisor”.

Neither Mercier nor his daughter were able to provide any proof of actual work done.

Joelle Mercier, meanwhile, claimed during the trial that she had served as her husband’s representative at village fairs and funerals.

She was found guilty of conspiracy to embezzle public funds and of receiving stolen money and sentenced to a suspended prison term of 18 months and a €40,000 fine.

The court handed the daughter a 12-month suspended sentence and a fine of €10,000.

Prosecutors had asked for the ex-minister to serve one year behind bars, accusing him of “creating smoke screens” in his defence and seeking to mislead the court.

Mercier had based part of his defence on his rural roots, pitting his “common sense” against the “Parisians” of the national financial crimes unit PNF.

Several French politicians have been convicted for similar offences committed before France in 2017 banned National Assembly deputies and senators from employing family members.

The move came in reaction to a public outcry over a high-profile case involving former right-wing prime minister Francois Fillon, who was found guilty of providing a fake parliamentary assistant job to his wife that saw her paid hundreds of thousands of euros in public funds.

The “Penelopegate” scandal, revealed in a media report while he was the front-runner in the 2017 presidential race, torpedoed  his political career and cleared a path for then-relatively unknown Emmanuel Macron.

Last year, a court trimmed Fillon’s sentence to four years in prison with three suspended — down from five years with three suspended when he was first found guilty in 2020.