The Case of the Missing $15 Billion Fortune: Part 1

0:04Our colleague Nick Kostov covers European luxury brands. Nice beat if you can get it. And a while back, he took one of the most beautiful road trips you can imagine, through the Swiss Alps to a small village called Ferré.

0:22Yeah, so Ferré is a tiny hamlet. There's maybe 12 houses. How I got there was I got a train from Paris to Geneva, and then I drove through the Alps. Really, really beautiful drive. And then you leave kind of the last town, drive another three kilometers, and then you get to Ferrer. So it's very, very remote. It's incredibly beautiful. I can't overstate how beautiful the views are from Ferrer. But Nick wasn't there to sightsee. I was there to find a guy called Nicolas Pouche, who is a fifth-generation heir to the Hermès fortune. Nicolas Poche is the great-great-grandson of Thierry Hermes, the founder of the French luxury goods company.

1:12For years, Poche was Hermes' biggest shareholder and one of the richest men in Europe. And then, two years ago, Poche made a jaw-dropping claim. He was out of money, broke, skint. As for his Hermes shares, shares which today would be worth about$15 billion, dollars, he claimed he didn't own them anymore. And he didn't know who did. The shares were, quite simply, gone.

1:45What was your reaction when you first heard that this multi-billion dollar fortune had gone missing? I mean, I think like... WTF? Yeah, WTF. Exactly. Exactly. WTF. Like, Like, my first reaction was, I better look into this. Nick's been looking into it for over a year now, trying to figure out what happened to Nikola Puesh's lost fortune. The search has taken him deep into the rarefied world of Europe's super rich. And the story he's uncovered involves a beloved handyman, a trusted financial advisor, and one of the biggest corporate rivalries in luxury. Welcome to The Journal, our show about money, business, and power.

2:34I'm Jessica Mendoza. It's Tuesday, November 25th.

2:43Over the next two episodes, we're going to tell you the story of Hermes Ayer Nicola Poche's missing billions. And what became of them. This is part one.

3:06What do you think of when you hear Hermes? I think of the absolute pinnacle of luxury. Hermes is, for many people, the ultimate status symbol. I think of Birkin bags. It has since become one of the world's most exclusive and expensive fashion accessories. Kelly bags, silk scarves. Elegant scarves, ties, and handbags, all meticulously made. It is, you know, top, top-tier luxury. But here's something you might not think of. Hermes is one of the top five biggest companies in Europe by market cap. It's bigger than the industrial giant Siemens. Bigger than banks like Santander and Deutsche Bank. Bigger than Airbus and Spotify and Novo Nordisk.

3:54That's right, handbags are bigger than Ozempic. And this has all been a huge boon for Hermès's heirs. Given the company's been around for 188 years, there are a lot of them.

4:09There are now more than 200 heirs to Hermès. So the family is split into three branches, the Guérin, Dumas and the Pouèche. Of those heirs, one of the most notable was Nicolas Pouèche. He would end up holding about 6 % of the entire company, Six million shares of Hermès. Nicolas Pouche became the largest individual shareholder in Hermès because he inherited shares, first of all, from his mother, and then he inherited an extra 1 % from his sister. And so he ends up with this enormous fortune. Pouche himself, how to describe him? I mean, early in his career, he did various things. He worked for an ad agency.

4:55He started a couture house with a stylist that went bust pretty quickly. He had a short stint as a water skiing instructor. Okay, why not? Why not? Yeah, exactly. And then from the mid-90s or so, he has lived entirely off Hermès dividends. With those dividends, Puesh built a comfortable life. He spent most of the 1980s on a farm he owns in Spain, tending to his horses. One of the only photos we have of Puesh shows a heavyset man with snow-white hair, holding a beautiful white horse by a lead. In the early 2000s, Puesh began spending more time in Switzerland, renovating a massive chalet in Ferre.

5:40And that's really how he spent his days. Puesh is 82 now. He never married and doesn't have any children. So there would be no one to inherit his multi-billion dollar fortune. Instead, Puesh made plans to leave it to a foundation he set up. He'd hired some people to build it up. And when you consider that the foundation was expecting a gift worth some$15 billion, you know, they were really building this thing out, expecting to have an enormous amount of money to spend. It seemed like Puesh's future was settled. And then came a series of seemingly sudden moves. Clues that not all was right with the Hermes heir.

6:21One clue came in the form of a letter. In 2023, Poche wrote to the head of his foundation. At the top of the letter, he wrote, in French, cancellation inheritance agreement. He sends a letter basically saying, listen, I've decided not to leave my fortune to you for various reasons, including the fact that I thought you guys could protect my fortune, but actually you can't. So no more money for you. The head of the foundation was shocked. He hadn't seen it coming. And he wasn't the only one to be summarily written off like this. A year earlier, Puesch had sent another letter, seemingly out of the blue.

6:59He addressed it to his financial advisor. It's a guy called Eric Freyman. Eric Freyman had total power over Puesch's finances for many, many years. 25 years. Freyman served Switzerland's elite and was close to the Hermes family. He'd managed Puesch's financial life for decades. and Puesh considered him a friend. But in this letter, Puesh fired Frémont with no explanation. The Frémont letter basically says, thank you for your service, but I don't, you know. Goodbye. Exactly, next. Firing your longtime financial advisor, pulling out of your own foundation. These were surprising moves. But to Nick, they were less surprising in light of a rumor that had started going around.

7:49that Puesh was claiming to have lost his entire fortune.

7:57Last year, Nick wrangled an interview with that fired financial advisor, Eric Fraymont. Nick wanted to get Fraymont's perspective on what might be going on with the Hermes Air. Yeah, so this was a meeting that took place. We were in a hotel near Geneva Airport. So we were, you know, in a kind of quiet spot of a hotel lobby. The man who walked in was about Precious age, thin, with white floppy hair and dark caterpillar eyebrows.

8:48But sensitive, like sensitive, fragile. That was my impression of Eric Freyman. And Freyman had a wild story to tell about his former employer. I've told you that Poche isn't married and doesn't have children. But he didn't live alone. What he did have was a handyman and his handyman's wife and their children. Poche had grown exceptionally close to his live-in handyman, a guy named Jadil Boutrak and his wife, Maria Paz. And according to Frémont, the two were key to understanding what was going on with the Hermès heir. Which, Frémont said, was this. The Hermès shares weren't actually missing. Pouche was lying.

9:34He still had the shares, and he was scheming to leave them to his handyman. So Frémont's story was that Pouche wants to leave his fortune to his handyman slash gardener. The problem is that he has agreed to leave it to his foundation. And legally, in Switzerland, once you agree to leave your fortune, for example, to a foundation, you can't go back on that unless it's to give it, for example, to a child or somebody you're related to. Puesche's solution to this problem, according to Fraymond, was to try to formally adopt his handyman as his son. In Frémont's telling, this adoption would be the culmination of years of manipulation by the handyman and his wife.

10:20He says that they have a hold over Puesh, that Puesh is a vulnerable old man, that he was isolated by COVID, and that these guys, the handyman slash gardener and his wife, has got their claws into him and are basically manipulating him to leave his fortune to them. That was his story. Fraymond didn't just make his case to Nick. He filed a report to a Swiss welfare agency claiming that the handyman and his wife were taking advantage of Puesch. He said Puesch had gifted the couple multiple properties, including a home in Switzerland. Puesch's lawyer called the allegations absurd, adding that the gifted properties would still only constitute about 1 % of Puesch's fortune.

11:08The report was ultimately dismissed. Nick had heard Freymans' version of events. But what about Puesch's? What was his side of the story? After the break, Nick tracks down the Hermes Air.

11:30Der Insolvenzantrag ist gestellt. Und plötzlich läuft alles im Eiltempo. Für unsere Protagonistin beginnt jetzt die härteste Phase. In Folge 4 unserer Serie Endstation Insolvenz zeigen wir, warum Offenheit zur wichtigsten Währung wird, weshalb ein Insolvenzverwalter kein Gegner ist und wie sich ein Betrieb stabilisiert oder geordnet abgewickelt wird. Im Podcast-Kanal Gute Geschäfte von Kreditreform. Überall, wo es Podcasts gibt.

12:08to the tiny hamlet of Ferré because he wanted to know what Nicolas Poche made of all of this. What did the Hermes heir think had happened to his$15 billion fortune? It turned out Poche wasn't hard to find. It's pretty obvious which one his house is because it's absolutely huge and all the other houses are normal size. And so I walked up to the door. As I knocked on the door, he came around the side of the house and he was leaving to get in a car with a woman.

12:45So you don't have a lot of time. He's clearly leaving. What did you ask him? I mean, my first question, to be honest, was did you have a nice summer? Which was not what I'd driven like eight or nine hours for. But I figured maybe if I just get him talking, you know, maybe he'll become chatty. I think to did you have a nice summer, he said yes. and carried on walking. So I think it was in French, I said, où sont les actions, où sont ces actions, something like that. But basically meaning like, where are these shares? Yeah, where are the shares, Mr. Poech? And unsurprisingly, he didn't answer me.

13:26Madame, Monsieur Poech, si je peux vous... Nick never got a real interview with Poech. Poech's lawyer called the whole thing a, quote, murky affair. and declined to comment in depth. But Nick was able to get a picture of Puesh's thinking from lawsuits the air filed over the years and from conversations with people close to him. Here's what Nick gathered. According to Puesh, the whole thing likely started decades ago, back in the early 2000s, when Hermes found itself in a knockdown fight with another big name in luxury, a company called LVMH. Talk to me about LVMH. So LVMH is the world's biggest luxury company.

14:10It's a conglomeration of about 75 brands that go from Dior to Louis Vuitton to Celine to Tag Heuer to Moet to Hennessy. I mean, walk down Fifth Avenue in New York or Rodeo Drive or Montessando in Japan or Hong Kong or whatever. A lot of these stores will be owned by LVMH. LVMH's name is itself a mashup of various luxury brands Louis Vuitton, Moet, Hennessy And at the very top of this many-headed luxury hydra Is one of the richest men in the world Bernard Arnault He has many nicknames The Lord of Logos, the Pope of Fashion The one he hates the most is the Wolf in Kashmir And Arnault is a capitalist You know, he was schooled in American capitalism in New York in the 80s, and he would go and acquire brands from families.

15:06Over the years, Arnaud built LVMH up from a handful of brands into a juggernaut with about 75 different labels. I think some families who want to sell their brands see him as a safe pair of hands. He's very good at developing brands, making them bigger. He's got amazing attention to detail, but he's also very tough. And if he wants a brand, he will try and acquire it. And back in 2001, the brand Arnault was interested in was Hermes. Arnault wanted to build a sizable stake in the company. Because Hermes is still largely owned by descendants like Puesh, this would mean buying up shares from individual members of the Hermes family.

15:49And so LVMH reached out to someone with close ties to the Hermes clan, someone they thought could help. That person was Nicola Puesh's financial advisor, Eric Freymont. So according to Freymont, someone in touch or working with LVMH reached out to him and essentially said, would you be willing to help us build up a stake, an investment in Hermès? And Freymont says, sure. Freymont detailed his work with LVMH in a legal claim he later made against Arnaud and the company. He says he worked for years building up Arnaud's Hermès stake. This was a delicate operation. Sure, some Hermes family members might be willing to sell some stock and cash out.

16:35But Hermes the company most definitely did not want its biggest rival becoming its biggest shareholder. To avoid triggering alarm bells at Hermes, the share buying scheme would have to be kept a secret. And it worked. With Fraymond's help, LVMH built its Hermes stake to 14%. Hermes was none the wiser. Until 2010, when Arnaud finally revealed his secret stake. He decides, OK, I'm going to pull the trigger. And he announces to the market, unbeknownst to Hermès, that he has a 14 % stake, which is going to rise to 17 % in the coming days. And so Hermès is stunned. Yeah, they're all like, wait, wait a minute, when did this happen?

17:15Yeah, wait a minute, when did this happen? How did this take place? And obviously he's been working on it for a decade. And so the question at this point is, where has he got this 17 %? To build a 17 % stake, Hermes knew that Arnault must have bought shares from Hermes' family members. It was the only way. So who had sold? Many angry fingers pointed at one of the company's biggest shareholders, Nicolas Puesch. But Puesch denied it. He said he hadn't sold any of his inherited shares to Arnault. I still have my 6%. So he's like, it's not me. Yeah, he's like, it's not me. And Precious belief is, and he's asked about this by investigators for the French stock market authorities and others.

17:58He's saying, I still have my 6%. So it must be somebody else, basically, is what they're thinking. Must be somebody else. Although at this point, a lot of people are, let's say, suspicious. Why was this a mystery? Like, don't companies usually just know who their biggest shareholders are? Can't you just check who owns the shares? I mean, usually, yes. but Puesh owned bearer shares. Bearer shares are kind of like cash in a way. They're not registered. Unlike normal shares, bearer shares don't need to be registered to a specific person or business. They're owned by whoever physically holds or bears the piece of paper, thus the name.

18:38And like cash, they're more anonymous. People close to LVMH say not even the company knew for sure whose shares they'd bought. The finger-pointing went on for years. Hermes and many members of Puesch's family believed he'd sold them out. Puesch denied it over and over again. And then, in 2023, Nicolas Puesch filed a series of lawsuits against Eric Fraymont in Switzerland and in France. The contents were explosive. In the lawsuits, Puesch accused his former financial advisor of massive fraud. He said his money was gone, his Hermès shares gone. As for what had happened to them, Puig said he now suspected that Frémont had sold them years ago, and the most likely buyer was LVMH.

19:30So he's saying that Frémont sold his shares without his permission, essentially. Yeah, exactly. So he's basically saying, Frémont has stolen everything I have. And as part of the lawsuits, he lists a number of people who he believes that investigators should question. One of them is, of course, Bernard Arnault and LVMH. And he says, you know, if these guys should be questioned, their offices should be searched, their homes should be searched to see if they know anything about where my shares have ended up. Right. Did my shares actually wind up at LVMH? Did my shares wind up at LVMH? Exactly. Exactly.

20:11A spokesperson for Arnaud and LVMH declined to comment. Nick spoke with Fraymond, the former financial advisor, twice last year, once at that hotel in Geneva and a second time in Paris. He asked Fraymond about Puesche's allegation. How did Fraymond respond to the allegation that he stole the shares? So he strongly disputed that allegation. He was, I would say, almost incensed. He certainly said he felt incredibly betrayed, that this was completely unfair, and that he had worked diligently and honestly for Puesh for 25 years, and that his allegations were completely crazy. Accusations were flying.

20:57But who to believe? Was it the handyman? Fraymont? Puesh himself? And then, one day this past summer, Nick got a text from a source. Eric Fraymond was dead. Tomorrow on The Journal, finally, some answers. Have you solved the mystery? I'm further along than I was. Yes, I think I know what happened to the shares, yes. And no, it wasn't the handyman. That's all for today, Tuesday, November 25th. The Journal is a co-production of Spotify and The Wall Street Journal. If you like our show, follow us on Spotify or wherever you get your podcasts. We're out every weekday afternoon. Thanks for listening.

21:45See you tomorrow.