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L’Oreal Denies Wrongdoing in Russia Gray-Market Investigation

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April 18 (Bloomberg) -- L’Oreal SA, the world’s largest cosmetics maker, denied any wrongdoing after a French newspaper today reported a criminal investigation into claims its products were sold in Russia outside approved distribution channels.

An investigating judge was appointed last year to lead the probe into allegations of breach of trust and money laundering by a former distributer, who said L’Oreal didn’t stop Russians from buying products duty-free and bringing them back for resale, according to Liberation.

The dispute began in 1998 and “courts have ruled in L’Oreal’s favor five times,” said Stephanie Carson-Parker, a spokeswoman for the company. The former distributer’s “unfounded and overly-publicized” allegations “are aimed at artificially reanimating the case.”

L’Oreal filed a defamation complaint last year over the claims.

A spokeswoman for the Paris prosecutors didn’t immediately return calls for comment.

To contact the reporter on this story: Heather Smith in Paris at hsmith26@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net.

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