• by Richard Whitman , Columnist, May 21, 2017

Publicis Groupe last week said that allegations by publication L’Obs and a French advocacy group that it improperly accounted for a settlement with software provider SAP totaling roughly 150 million euros were bogus. It reserves the right to sue the pants off both organizations if the allegations negatively impact the company, its stock or its shareholders.

The contretemps boiled over last week, but started with a dispute between SAP and Publicis Groupe over a major back-office software deal struck nearly a decade ago that incurred years of delays. The parties agreed on an arbitration settlement of around $150 million euros.

The problem, according to L’Obs, was how the holding company accounted for the settlement funds. The publication concluded the firm reported those funds in a way that made its fourth-quarter 2014 organic growth look better than it actually was.

Publicis Groupe, however, disputed that conclusion. In a statement, the company said the accounting was strictly on the up-and-up.

“The compensation received by Publicis Groupe [from SAP] was allocated in Publicis Groupe’s accounts in part to the reduction of the book value of the balance sheet assets corresponding to the project, in part to the neutralization in the 2014 income statement of the extra costs incurred as a result of the delays, and in part to cover forecasted extra costs in the coming years as a result of the delays known by the Group.”

The firm added: “This accounting treatment has been validated by Group’s auditors, who confirmed that it was not necessary to mention this information in the notes to the financial statements relating to 2014 accounts nor in the annual report. “

The holding company noted that it communicated its view to the advocacy group, Gouvernance en Action, as well as to “the journalist of L’Obs who questioned us in this respect.”

Here’s the kicker: “We reserve all our rights for any damages that such publications may have on our stock price, the company or our shareholders.”  That’s the sue-the-pants off part, in case it wasn’t clear.