The missing 15 billion US dollars has a follow-up now.

The story of this secret stakebuilding dragged on intermittently for over two decades.

By Li Man

In July 2026, the entire luxury industry's attention was simultaneously focused on two courtrooms.

One was a court in China. The Suzhou Intermediate People's Court issued a first-instance judgment in the trademark infringement case of LV suing the new tea beverage brand Molly Tea White, ruling that Molly Tea White infringed on LV's exclusive rights to seven registered four-leaf flower graphic trademarks, with a total awarded compensation of 10.3 million yuan. The judgment has not yet taken effect, and Molly Tea White has publicly stated that it will file an appeal in accordance with the law.

Anyone familiar with LV knows that the Molly Tea White trademark infringement case is just the tip of the iceberg of LVMH's relentless pursuit of trademark protection. From the sign font of a South Korean fried chicken restaurant, to the monogrammed hand sanitizer bottle of an American workshop, to a refugee handbag on a Dutch artist's canvas, over the past two decades, whenever someone touches that iconic monogram logo, even just brushing against its edges, LVMH's legal letter will always be delivered precisely. There is a saying circulating in the industry: LVMH's legal team numbers over a hundred people, with an annual budget of hundreds of millions of euros. The figures are unconfirmed, but in trademark precedents across major global jurisdictions, no one can match the frequency with which LVMH appears in court as a plaintiff.

This extreme pursuit of brand control is also reflected in LVMH's maneuvers on the capital battlefield.

Almost simultaneously at the Paris court, LVMH submitted a 20-page response document to the court, systematically disclosing for the first time the complete process of its secret stakebuilding in Hermès at the beginning of this century, which once made LVMH the second-largest shareholder of Hermès outside its founding family.

The case originated when 83-year-old Nicolas Puech, the fifth-generation heir of Hermès, filed a lawsuit in 2025, claiming his losses were valued at over $15 billion (approximately 108 billion yuan), with both LVMH and its chairman Bernard Arnault listed as defendants.

The story of this secret stakebuilding dragged on intermittently for over two decades, with sporadic reports leaking out along the way. Now that this response document has finally surfaced, we can sort out the entire game from the very beginning.

The Crack in the Equity Structure

The story begins with a rift within the Hermès family.

In 1993, Hermès was listed on Euronext Paris. Despite going public, the vast Hermès family still retained 74% of the shares, spread across more than 200 family members, with no single individual holding more than 5%.

For anyone with designs on Hermès, this was a dangerous structure: shares were sufficiently dispersed, yet sufficiently united. There was an unwritten tacit understanding among family members that they would never sell shares to outsiders.

But exceptions always exist.

Nicolas Puech, a fifth-generation descendant of Hermès' founder, once served on the group's board of directors and was for a time its largest individual shareholder. He held a senior management position at Hermès but left not long after. Later, he founded his own fashion company, worked as a water-skiing coach, and eventually stopped working entirely, living off dividends from his Hermès shares.

Around 1998, Puech moved from France to Switzerland, escaping the family's oversight. He entrusted all his assets, including his invaluable Hermès shares, entirely to a Swiss wealth manager: Eric Fremond.

Puech signed a "discretionary management authorization." This meant Fremond could decide when to buy and when to sell on his behalf, without needing to consult him for every single transaction.

This signature later became the starting point of the entire storm.

Fast forward to 2001, a crucial meeting took place: Fremond approached Pierre Godé, a trusted aide of Arnault.

According to LVMH's account in the 20-page document, Fremond proposed forming an alliance with Puech. Puech, who was dissatisfied with his lack of say in the family business at the time, was seeking to play a greater role in the company's governance.

LVMH argued that the group's goal was not to acquire Puech's shares, but to form a shareholder alliance with him, thereby influencing Hermès' strategic decisions and striving to attract other family members to join.

For many years afterward, Fremond and Puech met repeatedly with Arnault and Godé, at locations including Château d'Yquem, a Bordeaux winery owned by LVMH. Fremond also developed close ties with other members of the Hermès family.

What truly escalated the situation was 2007. That year, Fremond informed LVMH that a large number of Hermès shares were about to enter the market, and threatened that unless the group acted quickly, he would sell those shares to other competitors. LVMH stated that it was this warning that prompted the group to set up an equity swap structure and begin building its position in secret.

A stock swap is a type of financial derivative. Simply put, LVMH did not directly buy Hermès shares on the secondary market, which would have triggered information disclosure obligations. Instead, by making bets with banks, it indirectly obtained the gains from the stock price rise, while quietly accumulating positions under the radar. From 2001 to 2002, LVMH acquired a 4.9% stake in Hermès through its subsidiaries. In 2007, LVMH resumed increasing its holdings, purchasing equity derivatives through financial intermediaries and subsidiaries, keeping each position below 5% to evade information disclosure requirements.

This maneuver allowed Arnault to quietly weave a web outside the Hermès family's line of sight.

On October 24, 2010, the bomb went off. It was a Wednesday morning when Patrick Thomas, then CEO of Hermès, received a phone call from Arnault. He told Thomas that LVMH had acquired a 14.2% stake in Hermès through cash-settled equity swaps, and with the convertible derivatives it already held, its total shareholding reached 17.1%, making it the second-largest shareholder of Hermès outside the family in one fell swoop.

Subsequently, Arnault publicly announced this position, sending shockwaves through the entire luxury industry.

The Hermès family's anger was imaginable. A competitor, without the family having the slightest knowledge, had already reached their doorstep. Worse still, Arnault's appetite was far from sated. By December 31, 2012, LVMH's shareholding ratio had further climbed to 22.6%.

The Hermès family acted quickly upon hearing the news. In 2011, family members pooled most of their individual shares to establish a holding company, locking in more than half of the shares to prevent a hostile takeover. It was a counterattack: the family built a wall through unity, blocking the "barbarians" at the gate.

What about Puech? He did not join the family holding company, but retained his personal shares. Outsiders thought this was a display of individuality, but subsequent events proved that it might well have been a fatal loophole that exposed him to "capital infiltration."

The lawsuit between the two sides lasted for a year. Eventually, France's financial market regulator determined that LVMH had failed to disclose its position-building activities in a timely manner and imposed penalties. In 2014, the two sides reached a settlement: LVMH promised not to increase its holdings further, and to transfer all its Hermès shares to LVMH's shareholders. The French judiciary also issued a "no prosecution" ruling on the related dispute in 2015. According to market estimates, this investment ultimately brought LVMH an investment gain of approximately 3.8 billion euros.

The story seemed to end there.

$15 Billion, Vanished Into Thin Air

The real bomb was planted more than a decade later.

In the summer of 2022, Puech called Fremond to his home and asked a question: "I told you before to transfer 1 million Swiss francs to the gardener's family, how did that go?"

This gardener had worked at Puech's home for many years, and he and his wife took care of Puech's daily life. Puech had no children in his later years, and the gardener couple was one of the closest people in his life. Out of trust and gratitude, Puech had entrusted Fremond to transfer a sum of money from his account to the gardener's family.

Fremond evaded the question. The gardener's wife, who was nearby, sensed something was wrong and later told Puech: "We never received any transfer at all." Puech sensed something amiss, so he hired a legal team and a consulting firm to conduct a comprehensive review of his financial situation.

This investigation revealed a catastrophe: the account was already empty. 90% of his Hermès shares had been sold off as early as 2008. 6 million Hermès shares, estimated by the Paris Judicial Court to be worth about $15 billion, had evaporated without Puech having the slightest knowledge.

In September 2023, Puech filed three lawsuits against Fremond in Switzerland. The Swiss court ruled in 2024 that Puech had voluntarily entrusted the management and there was no evidence to support the fraud allegations.

After getting no results, Puech did not give up. In 2025, Puech formally filed a civil lawsuit again at the Paris court, naming LVMH, Chairman Arnault, the Arnault Family Holding Company, and the deceased wealth manager Fremond as co-defendants. He claimed that 6 million Hermès shares under his name, worth about $15 billion, had been secretly transferred to LVMH by his long-trusted financial advisor.

More intriguing is that Fremond died in July 2025, two months after the lawsuit was filed. While French prosecutors were launching a criminal investigation into him for "breach of trust and misappropriation of assets," he ended his own life in Switzerland. The most crucial witness in the case vanished in this manner.

Parisian prosecutors have launched an investigation and recently announced a formal probe into three lawyers, one of whom previously provided services to LVMH more than a decade ago when the group was aggressively purchasing Hermès shares. On May 18, a Swiss lawyer was placed under formal investigation on suspicion of being an accomplice to aggravated breach of trust and concealing the proceeds of breach of trust. On May 27, another lawyer was investigated on suspicion of participating in the misappropriation of Puech's Hermès shares to LVMH between 2001 and 2014. All three lawyers currently deny any wrongdoing.

LVMH recently launched a counterattack, which led to the aforementioned 20-page response document submitted to the Paris court.

This is LVMH's first public response to the dispute. The core argument of the document is: LVMH has been dragged into this matter for no reason. Puech involved Arnault and LVMH in the case solely because the latter two have the ability to pay huge compensation, while Fremond's estate and his companies do not have the corresponding solvency.

"If Puech did not receive payment for the sale of his shares, that is a dispute between him and Fremond, and has nothing to do with LVMH."

LVMH insists that it was "completely unaware" of any alleged misappropriation of assets. The group always believed the transactions were normal capital cooperation, and never knew that Fremond had embezzled any of his clients' assets.

However, investigators found a key clue: a large portion of the approximately 6% Hermès shares held by Puech was transferred to Société Générale through stock swap transactions with LVMH at that time. Investigators are verifying whether anyone involved in the transactions knew that these shares flowing into LVMH's secret positions had been transferred without the owner's knowledge.

In response, Puech's lawyer stated that all liability determinations currently await the results of the French criminal investigation, and no party can be cleared of suspicion before the investigation is completed.

In the 2010 acquisition battle, LVMH lost. The Hermès family used their unity to retain control. But 15 years later, Arnault's name once again appeared on the defendant's bench in a Hermès equity dispute. This time the amount is larger, and the case is even more confusing.

In the world of Hermès, a handbag can take years to wait. A stake, however, can disappear for more than two decades. Who exactly took it? And that most crucial witness, Fremond, can no longer speak.

To prevent a repeat of incidents like Puech's wealth evaporation, the Hermès family established a unified family office Krefeld in 2022. It was formed by integrating eight independent family offices and investment vehicles, bringing together the wealth of different branches of the Hermès family. Its governing documents strictly limit ownership to descendants of Émile-Maurice Hermès, the third generation of the family.

It is reported that Krefeld did not officially begin operations until 2024. It has currently invested in the French insurance company Albingia, and together with KKR, has taken a stake in the health and beauty group Anjac Health & Beauty.

According to the Bloomberg Billionaires Index, more than 100 family heirs controlling Hermès' wealth have a combined net worth of $186 billion, making them one of the richest families in Europe.

This article is from the WeChat official account "ChinaVenture", by Li Man, and is republished with authorization from 36Kr.