Recently, the Shanghai Jing’an District Court disclosed two criminal cases involving a massive corruption scandal at the Chinese branch of the international luxury goods giant LVMH. The misconduct of the employees involved in the case had been ongoing at this luxury goods company for nearly 10 years.
According to the criminal judgments with case numbers “(2024) Hu0106 Criminal First 1037” and “(2024) Hu0106 Criminal First 1158” from the Shanghai Jing’an District Court, a significant embezzlement case occurred at LVMH’s subsidiary LVMH Parfums et Cosmétiques (Shanghai) Co., Ltd. From 2015 to 2023, the senior director of training at LVMH Parfums et Cosmétiques, Mr. Ying, and the manager of the training department, Ms. Cui, collaborated with three defendants and their operating company to embezzle money from the company through fictitious meeting fees, consulting service fees, translation service fees, etc. The amount involved in the case exceeded 21 million RMB.
The three defendants, Mr. Su, Mr. Wu, and Mr. Hu, were each fined and sentenced to two years and nine months, two years and three months, and two years in prison, respectively, with all sentences suspended.
The judgments in the two cases were respectively dated November 29, 2024, and December 9, 2024. The three defendants have all been sentenced, while two internal staff members at LVMH Parfums et Cosmétiques will face separate legal proceedings.
According to reports from the Times Finance, official data shows that LVMH Parfums et Cosmétiques was established by the French luxury goods giant LVMH Group in 2000 and is mainly responsible for the sales of some perfume and cosmetics brands under the group in China, including Dior, Guerlain, Givenchy, Benefit, Make Up For Ever, Acqua di Parma, Fresh, and other brands. Business registration records from Tianyancha show that the company had 1,204 employees in 2023.
In recent years, due to the economic downturn and the tense political atmosphere in China, Chinese consumers have started to tighten their purse strings and gradually move away from luxury brands such as LV and Gucci. As a result, LVMH and Kering Group have seen a double-digit decline in sales in Asia.