Scandal The Family: Big names in the economy and the world of startups among the victims

05/23/2022

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A first circle concerned paid in 2020 one million euros to invest in Stripe, which is valued at 95 billion dollars. There is Dylan Deschamps, son of the coach of the national football team, who paid 100,000 euros. At his side, Florent Steiner, founder of the site Adopte un mec (100,000 euros also bet) and Hugo Mulliez, general manager of Ausspar, the holding company of the Auchan group (more cautious, with 5,000 euros allocated). Other personalities are exposed via two SPVs formed in the Cayman Islands to buy 1.7 million euros of SpaceX and AirBnB securities. This time, it is the Poutrel family at the origin of Ingenico, specialist in payment terminals, which would have lost track of the euros intended for AirBnB.

Other complaints could follow concerning three other vehicles which were to invest in Algolia, but which are “currently the subject of additional verifications”, according to Ivan Terel, the plaintiffs’ lawyer. One of them (where we find the Poutrel family) was supposed to invest a million euros, but in reality only paid half the sum. According to its accounts, the balance was loaned to other companies in The Family group.

As for the 53 other SPVs, their business angels are worried, fearing to be caught in the turmoil, even if TheFamily assures that they are not concerned by the case. Within these structures are again various known names. Like Eole Peyron Ricard, great-granddaughter of the Ricard family, who invested in Payfit. Or the family of optician Alain Afflelou, who bet 100,000 euros on Luko, a distributor of insurance products. Without forgetting Edward Bouygues, son of Martin and president of Bouygues Telecom, who lost 50,000 euros by investing in the specialist in reconditioning telephones, Save my SmartPhone, which was finally liquidated. As well as the famous youtuber Olivier Roland (10,000 euros lost). But of course risk is an integral part of this kind of activity. More surprisingly, there are those who have struggled to recover their profits, such as the business angels of Captain Train. While this company was sold very well in 2016, for nearly 200 million euros, they had to wait until 2020 to receive their share. In the meantime, part of the capital gain has been lent or invested in other companies of The Family group.

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episode 1

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If the suspicions of embezzlement are limited to ten SPVs, the scandal affects the entire The Family ecosystem. Starting with the incubator itself, which brings together prestigious investors in its capital: the Arnault family, Noël Forgeard (former boss of EADS), Alexandre Mulliez (grandson of the founder of Auchan), Adrien Dassault (small -son of Serge Dassault), Frédéric Mazzella and Francis Nappez (founders of Blablacar), Nadra Moussalem (head of the Colony Capital fund for Europe), Fany Pechiodat (co-founder of MyLittleParis)… And also funds like Rocket Internet, Idinvest, Index Ventures, White Star Capital…

Created in 2013, this incubator has supported 120 start-ups, the most famous being Heetch, PayFit, Algolia, Doctrine, Captain Train… The start-ups have remunerated it by granting it free shares. The Family therefore found itself with a portfolio of more or less promising holdings. In an email to investors, Nicolas Colin quantified the net value of this portfolio at 54 million euros. In a post, Alice Zagury compared this value to the funds raised by the incubator: 20 million euros. In other words, one euro invested would now yield more than 2.7 times its bet… Those who put money into the incubator would therefore have nothing to worry about.

But when you lift the hood and take a closer look, it’s not. According to information from Capital, this valuation will barely allow investors to regain their stake. Indeed, most of the tumble will first go into the pockets of employees, and a priority investor, the LGT Capital Partners fund. They will be the first to be served on the resale products of the 120 start-ups in the portfolio.

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But that’s not all. The French structure The Family Paris is not exemplary either. In September 2018, the auditors Scorex and Patrick Massoutre expressed a reservation on the 2017 accounts, deploring that they had not been able to implement the procedures necessary to formulate their opinion. Then, in January 2019, they resigned, two years before the end of their term. Finally, their successors also expressed the same reservation on the 2018 accounts, limited to suppliers and purchases. Chance or coincidence, The Family Paris has not published the auditors’ report for the 2017, 2019 and 2020 financial years and has refused to communicate them to us. For Frédéric Montagnon, “the most elementary rules of structuring and good management have never been respected. Nor has there ever been a financial director with enough experience to support such a large project, no internal audit, and even less an external auditor mandated to monitor all activities.

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Part 2

03/27/2022

The Family suspects Osama Ammar of having embezzled 3 million euros, and attacked him before the commercial court and in criminal cases for “breach of trust” and “false”

War is declared between the shareholders of The Family. On the one hand, the co-founder and figure of French tech, Oussama Ammar, who left the incubator last November. On the other side, the two other co-founders and current directors, Alice Zagury and Nicolas Colin. The duo suspects Osama Ammar of embezzlement, and has informed shareholders of this in recent days, both orally and in an email, consulted by Capital. This email states: “we suspect a misappropriation of approximately 3 million euros, which was collected in 2019-2020 by the entity The Family (Global Godfathers) SPC. These amounts were intended to be invested in various technology companies based in the United States between December 2019 and October 2020”.

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The email adds that The Family has initiated several proceedings against Osama Ammar and his personal holdings, Fabuleo Ltd and Aletheis The First Ltd. First, a criminal complaint filed on March 23 for “breach of trust” and “false”. Then, procedures to freeze the assets of Oussama Ammar, and in particular his participation in start-ups. The Family indicates that it obtained injunctions to this effect in the Cayman Islands on March 15, and in France. Finally, proceedings before the Paris Commercial Court were initiated on March 3, with a first hearing to be held on Tuesday March 29.

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The success of The Family had earned its founders to be presented as examples and to be entrusted with official missions. In 2015, Emmanuel Macron, who came to visit the incubator, discussed innovation with Oussama Ammar, who congratulated the then Minister of the Economy: “with the Macron law, you have made one of the best laws for start-ups. -up”. At the end of 2017, Bercy tasked Alice Zagury with leading a working group on business financing in preparation for the Pacte law. Finally, Oussama Ammar was invited to teach at Sciences Po Paris, and was also appointed in 2018 as a member of the Global Tech Panel created by Federica Mogherini, High Representative of the European Union for Foreign Affairs.

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However, the proceedings against Osama Ammar promise to be complex. The Lebanese-born entrepreneur says on his LinkedIn profile that he moved to Dubai. His two personal holdings, Fabuleo Ltd and Aletheis The First Ltd, are registered in Hong Kong (the first filed the trademark TheFamily in 2013).

But The Family is not to be outdone, and has set up an interlacing of around twenty structures in the four corners of the world. Some companies are established in France. But the head holding The Family (Holdings) Ltd is registered in Great Britain, as is the holding company holding the shares, The Family (Fellowship) LLP. Others are registered in Delaware (The Family Global Operations Inc.) or the Cayman Islands (The Family (Global Godfathers) SPC). According to the letter atwo other managers are also shareholders via structures based in Hong Kong: Nicolas Colin via Dagmar first Ltdand Balthazar de Lavergne via Polygoexp Ltd.

Capital