Hermès heir's bid to adopt his 51-year-old gardener sparks battle with charity for EUR12 billion inheritance

By Louis Goss

A childless heir to the Hermès empire is seeking to adopt his middle-aged gardener with a view to cutting ties to the charity he founded and leaving him the bulk of his EUR12 billion ($13 billion) fortune instead.

Nicolas Peuch, 80, who owns a 5.7% stake in luxury fashion house Hermès (FR:RMS), is undergoing the process of adopting his long-time gardener, in order to make the 51-year-old from a "modest Moroccan family" his rightful heir, according to Swiss newspaper Tribune de Geneve.

The reclusive billionaire, who is currently one of Switzerland's wealthiest individuals, had previously pledged his fortune to the Isocrates Foundation, a charity he founded in 2011 to fund public interest journalism and enhance civic debate, the report said.

Now, Peuch, who is a fifth generation descendent of Hermès founder Thierry Hermès, is preparing to transfer his inheritance, which includes millions worth of properties in both Switzerland and Morocco, to his groundskeeper, who is himself married with two children, the report says.

The secretive heir's plans have, however, met opposition from the Isocrates Foundation, which has disputed the legal basis of Peuch's plans, according to the report. Those adopting adults in Switzerland must have lived with the adoptee for at least a year when they were a minor.

"From a legal standpoint, the abrupt and unilateral annulment of a succession agreement appears void and unfounded," Isocrates told Bloomberg News. "The foundation has opposed this move, while leaving the door open to discussion with its founder and president."

The billionaire's adoption plans follow his exit from Hermès' supervisory board in 2014 citing a family rift. Peuch later refused to pool his holdings with other members of his family in order to block a takeover by LVMH Moët Hennessy Louis Vuitton (FR:MC) chief Bernard Arnault, the report says.

French authorities subsequently launched an investigation into allegations Puech secretly sold his stake in Hermès, at a time when Arnault was building his own holding in the luxury fashion house, before submitting false information about his holdings, according to the report.

Peuch established his charity, the Isocrates Foundation, in 2011, by donating an initial 10 million Swiss francs ($11.5 million) of funding.

A document outlining the Isocrates Foundations' statutes, says: "Under no circumstances will the assets of the Foundation be returned to the founder, to his heirs or donors."

MarketWatch approached Hermès and the Isocrates Foundation for comment.

-Louis Goss

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12-19-23 1023ET

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