The story goes back to 1981 when CL, then run by Claude Pierre-Brosolette, bought the Rotterdam Slavenburg bank. The bank turned out to be a can of worms, used for, among other purposes, laundering drug money. CL renamed the bank Credit Lyonnais Bank Nederland and cleansed the Augean stables.
In the late 1980s, however, the picture was marred by the financial problems of one of CLBN's biggest clients, Cannon, the production company run by two flamboyant Israeli cousins, Yoram Globus and Menahem Golan. Only one man was prepared to take on the mess: Giancarlo Parretti, an Italian financier with a mysterious background.
Parretti earned CLBN's gratitude by reducing Cannon's debts by dollars 100m through the judicious sale of assets (although he kept the second biggest cinema chain in Britain, formerly owned by Thorn- EMI). The French government stopped him buying Pathe, but this merely encouraged Parretti to go for a bigger prize: MGM, put in play by its then owner, financier Kirk Kerkorian.
Parretti was joined by a compatriot, Florio Fiorini, former finance director of the giant Italian petrochemicals group ENI. Fiorini was a stalwart of the P2 Masonic lodge linked to many of Italy's big financial scandals. Indeed, Fiorini lost his job after it was revealed ENI had lent dollars 50m to ill-fated Roberto Calvi of Banco Ambrosiano.
At first the Italians' dollars 1.3bn bid for MGM was laughed to scorn in Hollywood. But they succeeded with help from their friends at CL. However the MGM treasury was empty - there wasn't even enough money to complete the only two films it had in production.
In March 1991, after a number of embarrassing problems (including a six-figure cheque to Dustin Hoffmann that bounced) CL's head office took direct charge of the MGM account. It took 18 months to get rid of Parretti, and in July last year CL installed a new chairman, and announced a financial restructuring and a revival of the MGM subsidiary United Artists. This is an attempt to transform MGM into a saleable proposition because, under American law, it has to sell within the next three years.
MGM may prove to be salvageable - and CL may get something from its dollars 500m lawsuit against Kerkorian. But it won't from Fiorini's main venture, a Swiss holding company called Sasea, to which the bank had also lent money in the late 1980s.
Sasea's assets were an odd lot. They included flour mills in Yemen and several blocks of rent- controlled flats in Paris, whose value was arbitrarily revalued by Fiorini from pounds 6m to pounds 100m. It was then sold on to a company, United Dutch, controlled by Lord Beaverbrook, a former treasurer of the Conservative Party, who had to declare personal bankruptcy as a result of his links with Sasea.
The Sasea group as a whole was declared fraudulently bankrupt in October 1992, in the biggest single such crash in Swiss financial history, with FFr20bn owing to 3,000 creditors.
The bank has written down its FFr10.6bn loans to Sasea to under FFr1bn, but the case is due to come before a court in Paris. Fiorini has been in jail since October 1992, and his trial could provide further embarrassment.