France starts inquiry into LafargeHolcim's Syria activities - source

PARIS (Reuters) - France has launched a judicial inquiry into the Syrian activities of cement and construction group LafargeHolcim LHN.S, a judicial source said on Tuesday, investigating "the financing of terrorist enterprise" and endangering lives.

FILE PHOTO: The logo of LafargeHolcim is seen at its headquarters in Zurich, Switzerland, March 2, 2017. REUTERS/Arnd Wiegmann/File Photo

The appointment of three investigating magistrates, two financial specialists and one specialised in anti-terrorism, follows the opening of a preliminary inquiry last October.

The development does not necessarily mean any person or company will be brought to trial.

In April, LafargeHolcim’s chief executive Eric Olsen left after the company admitted it had paid armed groups to keep a factory operating in war-ravaged Syria.

An independent internal inquiry found protection payments made to intermediaries to keep open the Jalabiya plant in northern Syria were not in line with its policies.

LafargeHolcim said on Tuesday it had not been contacted by the French prosecutor’s office, but would cooperate with judicial authorities if it was requested to do so.

“Judicial procedures are conducted in a confidential manner and neither Lafarge nor any of its affiliates have been made a party to any of them,” a company spokeswoman said.

The judicial inquiry is into allegations made about payments that were made to banned groups but is not into individuals, although this could change in the future, the source said.

Shares in LafargeHolcim have not shown any significant reaction to the affair and were little moved on Tuesday, though analysts have said in the past that Olsen’s departure leaves a cloud of uncertainty over the company’s financial targets.

“It (the inquiry) is an issue, but for me it’s not too dramatic. We’re not talking about a Volkswagen type scandal here,” said Clairinvest fund manager Ion-Marc Valahu in a reference to the emissions-cheating affair that engulfed the German carmaker last year.

Valahu said he had used a dip in LafargeHolcim’s share price to buy stock when news of the Syrian payments probe first broke, and he had since held onto those shares.

Additional reporting by Gilles Guillaume, John Revill; Editing by Andrew Callus/David Evans