May 24, 2019 / 6:43 AM / in a year

UPDATE 1-Casino says Rallye has not lost control over the French retailer

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PARIS, May 24 (Reuters) - French retailer Casino said on Friday that the filing of its parent company for protection from creditors had no impact on the execution of its strategy and said the majority shareholder remained in control.

Rallye was placed under protection from creditors for at least six months as 70-year old retail kingpin Jean-Charles Naouri battles to shore up the finances of his retail empire.

Casino is Rallye’s main asset with a 51.7 percent stake. Rallye in turn is controlled by Fonciere Euris, Finatis and Euris, all in the hands of Casino chairman and CEO Naouri.

Casino chief financial officer David Lubek told a conference call that Rallye had not lost control over Casino despite the filing for protection from creditors.

Meanwhile short-seller Muddy Waters called the news “a resounding vindication of the warnings we sounded”.

In 2015, Muddy Waters criticized Casino’s complex structure and accounting practices, saying the supermarket retailer was “dangerously leveraged”, and managed for the short-term.

Casino’s shares were expected to open down 5-10 percent once they resumed trading, traders said. (Reporting by Dominique Vidalon, additional reporting by Richard Lough; editing by Leigh Thomas)

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