Greek broadcaster Antenna is going ahead with threatened legal action against Publicis Groupe , alleging that Publicis closed its Leo Burnett office in Athens without paying all the money owedto media owners.
Antenna has filed what it called in a statement a "criminal complaint" against two senior Publicis executives: Mathias Emmerich, senior VP-general secretary of Publicis Groupe , and Petros Venetis, former CEO of Leo Burnett Greece. According to Antenna, other Publicis officials may also become involved if the Greek courts decide that they have played a "punishable" role in events.
Greece permits private individuals and organizations to make a criminal complaint. The next step will be for a prosecutor to examine the merits of Antenna's complaint and decide whether to consider any action against Publicis.
The company was quick to distance itself from Mr. Venetis, who abruptly left his job as CEO last July. A Publicis spokesperson in Paris said, "When we discovered the reckless and fraudulent commitments that had been made by Petros Venetis, we immediately dismissed him and filed proceedings with the criminal court."
But the complaint against Mr. Emmerich is "groundless," Publicis said. "Every step we took was under the supervision of the Greek judicial authorities, to whom the matter has been referred from the start of the difficulties in July and who pronounced several decisions on this case."
Antenna argues that because Publicis is a large international holding company, it could have found the money to pay Greek broadcasters what was owed for the campaigns they had run.
But Publicis Groupe is confining the problem to Greece and the network level."Leo Burnett's exposure to Alter TV [a privately owned channel that filed for bankruptcy last May, leaving Greek agencies with a reported $236 million of bad debt] was so significant that we had no choice but to seek the protection of Article 99 of the Greek Law [equivalent to Chapter 11 in the U.S.], which resulted in the bankruptcy of the agency ... in December 2011," Publicis said.
Antenna said that it is "seeking the criminal indictment on the grounds of fraud under aggravating conditions," an offense that the broadcaster said can be considered a felony, punishable with imprisonment of five or 10 years.
Publicis claimed that it paid 60% of the total owed to four other Greek broadcasters (Alpha TV, Star TV, Sky TV and Mega TV) but that Antenna refused to settle and claimed that Leo Burnett offered it only 30 cents on the dollar.
Clients of Leo Burnett, Athens, included Procter & Gamble, Kellogg Co.'s and Philip Morris. Greece's continuing economic weakness has been one of the catalysts of the eurozone crisis. According to Group M, ad spending in the country fell 18.4% in 2011 and is expected to drop 7.1% this year, to $1.87 billion.