New fraud case hits France’s Hollande

New fraud case hits France’s Hollande

New fraud case hits France’s Hollande

French President Francois Hollande, center left, and his companion Valerie Trierweiler, center right, leave the Mohammed V mausoleum in Rabat, Thursday, April 4, 2013. AP Photo/Bertrand Langlois, Pool

Pressure is building on French President François Hollande over a disgraced ex-minister’s secret foreign bank account, as it emerged that his one-time campaign treasurer was a partner in companies registered in the Cayman Islands.

With Hollande away in Morocco on a state visit, calls were growing at home for top officials in his embattled Socialist government to resign over the scandal that saw former Budget Minister Jerome Cahuzac charged in a tax fraud probe.

Cahuzac, the minister responsible for cracking down on tax evasion until he quit two weeks ago, was charged April 2 with “laundering the proceeds of tax fraud” after he admitted to having an undeclared foreign bank account containing 600,000 euros, following weeks of denials.

Critics have accused Hollande and his government of either trying to cover up the scandal or of mismanagement for having believed Cahuzac’s denials. French media said Hollande was facing his biggest crisis since taking office, with daily Le Parisien saying the issue had become “untenable” for the government.

Daily Le Monde also reported that Hollande’s campaign treasurer for last year’s presidential vote, Jean-Jacques Augier, had joint ownership of two companies registered in the Cayman Islands, a well-known tax haven.

Augier confirmed the existence of the firms and said they had been set up to form partnerships with foreign entrepreneurs, Agence France-Presse reported. “There is nothing illegal,” Augier told Le Monde, which carried out the probe with the Washington-based International Consortium of Investigative Journalists and other international media.

“My adventurous nature is responsible. Maybe I lacked a bit of caution,” he said, adding that he invested in the company through a holding that runs all his Chinese business interests. Augier launched a Caymans-based distributor in China in 2005, with a 25 percent shareholding granted to a British Virgin Islands company, British daily The Guardian reported.

The scandal has overshadowed Hollande’s landmark two-day visit to former French colony Morocco, though he has refused to comment on it since arriving. Hollande appeared on national television April 2 to address the scandal, vowing a new law within weeks on the “publication and control” of the wealth of ministers and parliamentarians.