Gardener or Foundation? Hermès Huge Fortune Battle

Wealthy stories are always full of bizarre. A gardener who is more than half a hundred years old was actually adopted by the boss, and not only became a rich second generation overnight, but also became the sole heir to the family property of Nicolas Puich, the majority shareholder of Hermes. However, "pouring wealth and wealth" is not easy to obtain. In 2011, Pujci promised to leave his legacy to a foundation. Hearing that the estate was going into the hands of a gardener, the foundation was the first to jump out against it, and the ownership of the huge fortune of more than $10 billion was once again questioned.

The gardener's succession was opposed

The 80-year-old was single, childless and living in the southern Swiss canton of Valais. He retired from the board of directors of Hermès in 2014 but remains the "largest individual shareholder of Hermès", holding between 5% and 6% of the group's shares. It was previously reported that Puich decided to adopt his gardener, a 51-year-old man from an ordinary Moroccan family, and after the gardener became his adopted son, Puich would let him inherit part of his inheritance.

According to the Forbes real-time list of the richest people, Puich's latest net worth reached 11 billion US dollars, or about 80 billion yuan. This means that if the adoption is successful, the family employee will receive a huge asset of at least 40 billion yuan, including an equity stake in Hermès.

It is reported that the employee started out as a gardener, but gradually gained Puich's trust and began to take care of many of Puiqi's affairs.

Although there is no authoritative source to prove the motive behind Pujic's move, there are rumors that Puich formed a strong friendship with the gardener during his home quarantine. He was previously gifted a luxury property in Marrakech and a villa in Montreux.

Founded in 1837, Hermès has a history of 186 years and is now in its sixth generation. The Hermès family is also one of the richest families in the world. According to the Bloomberg Billionaires Index, the family wealth of the Hermès founder, who now has more than 100 members, increased by about 59% from the previous year to $151 billion, making it the richest family in Europe and the third richest in the world.

Puić's latest decision was met with clear opposition to his own foundation, the Nicolas Puech Foundation (now known as the Isocrates Foundation). In 2011, Puich signed a succession agreement for the foundation, bequeathing all Hermès shares to the foundation, which is reportedly more binding than a will.

In February 2023, Puić, who had changed his mind, wrote a handwritten notice to the Foundation stating that he had been misled in establishing the foundation of the same name and "intended to make other testamentary dispositions," according to the Tribune de Genève. The Foundation, for its part, expressed regret and opposition. "Based on the information available to the Foundation, the desire to unilaterally terminate the inheritance contract appears to be unfounded and null and void. Nicolas Borsinger, director of the foundation, said.

There is a clause in the inheritance contract between Puić and the foundation: if a child with the right of inheritance appears, he or she will be entitled to at least 50% of the assets. This is the current point of contention, and whether the Moroccan worker can become the legal heir of Puić is still to be determined by the adoption process and the authorities. In Switzerland, an adopted adult must live with the adoptee for at least one year when he or she is a minor. The media commented that "adopting an adult is not impossible, but it is unusual".

Descendants are not the only heirs

In the next step, if the gardener wants to successfully inherit the lucrative Hermès shares, in addition to resolving the contract with the foundation, he may also need to further confirm the status of Puich's legal capacity. More than 10 years ago, the property dispute of French L'Oréal heiress Betancourt lasted for several years, and her daughter accused photographer and "adopted son" Barnier of taking advantage of Betancourt's vulnerability and illness to defraud the family of hundreds of millions of dollars.

After three years of litigation, the court found that Betancourt suffered from "mixed dementia" and "moderate Alzheimer's disease" and was no longer fit to manage L'Oréal's vast assets, and that her 30.9% stake in L'Oréal was managed by her daughter. Barnier was sentenced by a Bordeaux court to three years in prison, 158 million euros in damages and a fine of 350,000 euros.

In addition to Pujic, some celebrities have already said that they do not plan to pass on their wealth to their children. George Lucas, the billionaire creator of the Star Wars universe, said the proceeds from the sale of the franchise to Disney for $4.5 billion will go to education, not his four children.

Lucas is one of the signatories of the Pledge of Donation. It is a charitable event that encourages wealthy people to donate most of their wealth to charitable causes. Billionaires who have made commitments include Microsoft founder Bill Gates, Warren Buffett, Tesla CEO Elon Musk, and Facebook founder Mark Zuckerberg.

What's even more fantastical is that the heir to the property is sometimes not necessarily a "person". Karl Lagerfeld, the originator of the fashion industry, left a legacy of hundreds of millions of euros to his pet cat, and hotel mogul Leonard Helmusli left the legacy to his dog, Trouble.

Internal equity disputes

In the Hermès family, Puich's "deviance" is not the only one. More than 10 years ago, Puich "lured the wolf into the house" and secretly sold his shares to the LVMH group, making LVMH the second largest shareholder of Hermès after the founder family, and LVMH launched a hostile merger and acquisition of Hermès.

In order to resist the attack of Bernard Arnault of the LVMH group, in 2011 the Hermès family established a special holding company, H51 SAS, which holds a total of 50.2% of the shares of 52 family members of the three internal families, and locks it in a family trust, and the family members become concerted actors to advance and retreat together.

According to the trust agreement, for 20 years (until 2031), the shares of Hermès will not be sold to the outside world, but can only be transferred and sold within the trust, so as to prevent external acquisitions and ensure the absolute control of the family.

In this battle to defend the equity, Pujic is clearly on the opposite side of the family. Not only did he deny selling his stake to Arnault, but he also refused to join H51, becoming now Hermès' largest individual shareholder.

Some insiders speculate that if Puich's succession plan passes, Arnault may be led to another shot. But the fact is that in the Hermès family trust, there is also a trust agreement in which the Hermès family members have a right of first refusal for the 12.5% stake held by family members other than H51.

A person engaged in financial investment told a reporter from Beijing Business Daily that if you want to discuss the current issue of wealth inheritance of high-net-worth individuals, family office is an unavoidable topic. Whether or not you need to set up a family office is related to the complexity of the wealthy individual's assets, the complexity of the family's expenses, and the total amount of assets, that is, the more complex it is, the more it needs to be managed by a specific family office.

How much net worth do people need the services of a family office? The answer is uncertain, the person said. Generally speaking, from the perspective of total assets, if a wealthy person's net worth exceeds $50 million, then simply going to institutional wealth management will not meet the demand, and it is necessary to consider setting up a family office. The U.S. Securities and Exchange Commission believes that families that set up a family office must invest at least $100 million in financial assets. Beijing Business Daily reporter Fang Binnan Zhao Tianshu