The Daily Telegraph reports that the French Government has refused a request by the US to extradite four French executives in connection with Credit Lyonnais' 1991 purchase of failed US insurer Executive Life's bond portfolio.
The affair has already seen the French government and Credit Lyonnais agree in principle to pay the state of California $585m and cost the bank its chairman, Jean Peyrelevade, who stepped down in order to be able to defend himself against allegations that he was illegally involved.
At issue is the 1991 takeover of Executive. At the time, it was illegal for a bank to own an insurance company in California. The insurer had a valuable bond portfolio, which Credit Lyonnais ended up owning and selling on for substantial profit. The bank has been accused of using other companies to act as a front for it and it has been claimed that Credit Lyonnais itself was effectively the acquiring agent.
A number of civil cases are still pending in connection with the affair and US authorities continue to investigate. Last week the French government was asked to agree to the extradition of former Credit Lyonnais chief executive Jean-Yves Haberer and three other executives said to have been closely involved in the deal. Rather predictably, the French Justice Ministry has said a resounding 'non'.