Performance of Veolia Environnement in Fulfilling Social Needs Research Paper - 3

Performance of Veolia Environnement in Fulfilling Social Needs - Research Paper Example The company had undergone heavy debt which resulted in fire-scale of company’s assets, dizzying financial condition, and an identity crisis. In the year 2002, the company had declared net loss of â‚ ¬12.3 billion. As a consequence, the company’s rate with regards to credit has turned into ‘Junk’ status. Vivendi Universal had sold a fraction of its large holdings to pay off the debt of stakeholders. The shareholders of the company sued against the former manager and claimed a price of 54 million USD. In the year 2002, due to the bad financial condition, Vivendi Universal was forced to sell parts of their stake in Vivendi Environnement. In order to retain the confidence of shareholders and also to reflect the organization’s greater independence, Vivendi Environnement was named as Veolia Environnement (Public Citizen 2005). Approximately 70% of international privatized water business is ruled by two companies, i.e. Veolia and Suez. Both the companies have made a joint subsidiary company so that profit can be shared between them in lieu of competing with each other. Both the companies had created an uncompetitive business situation through joint ventures (Public Citizen 2005). Veolia Environnement though used illegal methods such as bribery to get water contracts. For example, two senior executives of Veolia Environnement was convicted for giving bribe to the Mayor of St. Denis for obtaining water contract in the year 1996 (Public Citizen 2005). Besides bribery, there are other critiques of Veolia Environnement, for example, in the year 2003 Veolia Environnement’s waste management was ordered to provide fine of 100,000 Euro for damaging of 3500 hectares scrubland by fire. In 2000, Veolia Environnement misled the investors for purchasing the US Filter plant. The loss of 2.25 billion Euros had been represented to the investor a profit of 625 million Euros (Chandra, Girard, and Puscas 2005). Veolia Environnement has a poor r ecord of societal and environmental issues. To counter these bad records Veolia Company made a good long term relationship with the United Nations and World Water Council in order to build a good image before society. The company has conducted several advertisings for promoting privatization of water. Veolia Environnement affiliated with various international agencies for searching new market and expanded their business. The International Financial Institution (IFI) provided Veolia Environnement a large amount of money for the infrastructure of service and developed many urban renewal projects internationally.