Culture/News: Johnny & Laeticia Embarrass Switzerland

Grand old Granddad of French Rock in Hot Water over Fiscal Faux Pas

Ask any French man or woman between the ages of 17 and 97 who Johnny Hallyday is and the answer will be instantaneous. More often than not, you’ll even get a few bars from one of his many hits.

Born Jean-Phillippe Smet in Paris in 1943, the French Elvis Presley will turn 69 this year and is reputed to have sold more than 100 million albums over his long career. His live concert in front of the Eiffel Tower in 2000 attracted a crowd of half a million and he has had one song written for him in English (“I am the Blues”) by our own beloved Bono.

His private life is, of course, the subject of highly intensive and often invasive focus from the French media. A few years ago, a saga involving his apparent jumping to the front of the queue to acquire Vietnamese adoption rights for him and his wife created a furore in the press.

Today, Hallyday (who beat colon cancer in 2009) spends much of his time outside of France in order to escape what he sees as a punitive tax regime. He divides most of his year between his residences in California (where he lives in relative obscurity) and Switzerland. In order to benefit from the fiscal advantages of the latter confederation, one must be resident in the country for a minimum period of six months and one day.

According to Le Point, it would appear that the ageing singer has not been fulfilling this basic condition and is not even hiding the fact.

Nothing appears to be going right for the multinational organisation that Johnny Hallyday has become. He’s due to be back on stage for a concert in Montpellier on the 14th of this month, but spanners have started to fall into the works: Hallyday is apparently having problems with his French lawyers, the ticketing company for his Montpellier concert have been giving an advance of €8 million, underlining the pressure on the sales to deliver; he faces a €9 million tax bill and has suffered the surprise departure of Pierric Le Perdriel – a loyal power base who has been managing the Hallyday’s seven French companies as well as their personal expenses for the last 13 years. On top of all that comes the discreet request from the Swiss authorities for Johnny and his wife Laeticia to leave the country where they are supposed to have been resident since 2006.

The Hallydays have taken the precaution of ensuring not to rent out their Gstaadt chalet so as to go some way towards fulfilling the fiscal stringencies. “They have to be able to go there whenever they want,” clarified their fiscal lawyer Michel-Pierr Boutin.

But here’s the thing: Johnny and Laeticia Hallyday didn’t make any realistic attempt to hide the fact that they barely spent a couple of weeks of the year in the Swiss Alps. In order to ascertain this, it’s very simple: you only have to compile the news and photo entries posted by Laeticia on her Twitter and Facebook accounts, add the numerous reports with the couple posing for the camera in Los Angeles and on the beaches of Saint Barts and then factor in the number of theatrical shows, concerts and other public appearances on television and globalised Parisian soirées. When questioned by a Le Point reporter, the mayor of Saanen-Gstaadt said that the attitude of the singer was “counter-productive”, which is putting it mildly in a very politely Swiss manner.

For Switzerland, the lack of discretion by the Hallydays has become a real danger. The Helvetian Confederation is coming under scrutiny from EU and American authorities over the issue and fears that the carry-on of the famous couple is putting them in a compromising position.

By way of reminder of how the system works, the wealthy foreigner is not taxed on his net worth nor on his income, but on a figure based on five times the annual rental value of his property. In 2009, Hallyday himself confirmed that he paid no more than 900,000 Swiss Francs per year (about €750,000).

If the couple leaves Switzerland, it is likely that their chalet will be sold. Stepping back, however, the bigger picture of Hallyday Inc. is anything but simple.

As was revealed in a report by Le Point on the 12th of April last year, the international empire rests largely on two companies: one is based in Luxembourg while the other is based in Switzerland. Registered in the Grand Duchy, Nerthus Invest holds the musical publishing rights of the Piemento company, which itself is owned by Gedar SA, which is based in Monrovia, Liberia. In this fiscal paradise (on the “grey list” of the OECD), the commercial register indicates neither the name of the shareholders nor those of its social partners. “From an ethical point of view, I cannot comment on what is outside of the public domain, particularly on what type of contracts Nerthus is involved with and with whom,” said Guy Hornick, administrator of the company. In 2007, Nerthus had €10 million in financial assets. One year later, the figure was no more than €662,000. From the Swiss side, Johnny Hallyday holds 90% of Artistes et Promotion; a company is domiciled in Geneva in the offices of Posados & Vecino Consultores Internationales, which is a Swiss subsidiary of a financial group based in the British Virgin Islands, which is itself linked to an Uruguayan company. Even more astonishing is the fact that on the St Barts register, the luxurious Hallyday villa is not listed in their name.