The mystery of the 12 billion Hermès inheritance vanished into thin air

Resolving inheritance issues can be extremely difficult - but first, one needs to know where the inheritance is. In a story both comic and dramatic, Nicolas Puech, the octogenarian heir to the Hermès fortune and once a billionaire with a large stake in the company, finds himself at the center of a financial mystery where a fortune of 13 billion has vanished without an apparent trace – at least according to his version. There are many questions surrounding the affair. Last year, the entire fashion world (as well as a large group of curious readers worldwide) discovered the existence of 81-year-old Puech when the billionaire announced his unconventional plan to leave his fortune to his gardener. However, recent developments suggest that the fortune he intended to donate may no longer exist. As Bloomberg explains, a ruling from a Swiss court this month rejected Puech's accusations that his former wealth manager, Eric Freymond, played a role in the disappearance of his assets, and now the hunt for the lost treasure is on. Don't expect to find a chest of gold somewhere, though.

Recently, Puech's lawyers revealed in court that their client no longer owns the approximately 6 million shares, valued at roughly 12 billion euros, that he once held in Hermès International. This stake would have made him the single largest investor in the company, which has been in perpetual growth for years, so much so that the family of the current owners, a clan of over a hundred members conveniently termed the Hermès-Dumas, is the third richest family in the world, with a net worth of approximately 155 billion dollars according to the Bloomberg Billionaires Index. Initially, it was thought that the disappearance of the money was due to mismanagement by the wealth manager, Freymond, but in early July, the Geneva Court of Appeal found no evidence that the man had mismanaged Puech's fortune or that Puech had been deceived during the over two-decade period during which some of the shares were sold. The court document stated that the "gigantic fraud" Puech claimed to have been a victim of left no trace; the magistrates also indicated that the accusations were unclear and insufficiently supported. Puech's lawyer, Gregoire Mangeat, declined to comment on the ruling.

The court's decision is a chapter in the broader saga involving luxury magnate Bernard Arnault, founder of LVMH, who attempted to take control of Hermès over a decade ago by amassing shares in the same way he recently did with Richemont. Although Arnault failed, Puech became a family outcast due to his alleged involvement in Arnault's stealthy acquisition of a stake in the company. Puech's 5.7% stake remains an unresolved enigma from the 2014 confrontation when Arnault began unwinding his 23% stake and Puech resigned from the Hermès board. Puech claimed that his wealth, primarily derived from those shares, had disappeared without his knowledge since Freymond managed all his accounts. Court documents describe a 24-year period starting in 1998 when Puech began transferring Hermès shares to Swiss banks, accumulating 6 million shares. Freymond received mandates to oversee these accounts, with transactions starting in 2001. During a period of almost two years, ending in October 2010, a profit of 53.7 million euros was recorded from share sales, coinciding with Arnault's revelation of his stake in Hermès.

Despite family opposition, Puech considered Arnault an ally, not objecting to his entry among Hermès shareholders. However, the family managed to fend off Arnault's advances, fearing his hyper-aggressive business model (not for nothing the luxury magnate is nicknamed "the wolf in cashmere") would ruin the artisanal care and authenticity of their brand. Puech canceled Freymond's mandates in October 2022, starting an assessment of his wealth and succession planning. The following year, he filed three lawsuits against Freymond, alleging failure to disclose information, mismanagement of his foundation, various loans, and other investments, opening the case that would reveal the disappearance of his fortune. The Swiss court concluded that Puech had willingly entrusted the management of his affairs to Freymond, signing numerous blank documents and granting access to his bank accounts. Puech never claimed to have been deceived or not understood what he was signing, only that he left the decisions on growing his wealth to Freymond. The court stated that Puech could have revoked the agreement at any time and found no evidence of Freymond's dishonesty, attributing Puech's blind trust to his personal choices. At present, however, the whereabouts of the shares remain unknown, a kind of mystery for financial analysts. Axel Dumas, executive chairman of Hermès, when asked about Puech's shares during an earnings call, said, "We have no way of seeing or controlling them."