THE FRENCH Finance Minister, Thierry Breton, was forced to defend himself yesterday against claims linking him to an alleged financial scandal at the chemicals company Rhodia.

Two days after French police raided his office in Paris, M Breton, 50, went on radio to declare: “I really have done nothing wrong in this affair.”

The minister was a board member at Rhodia and head of its audit committee between 1999 and 2002 when the company is alleged to have misled investors over its finances.

M Breton, who is also facing an investigation into a deal by Thomson Multimedia, which he headed, has been put on to the back foot by the accusations, which have come during important negotiations over the 2006 French budget.

The claims are an embarrassment for President Chirac, who persuaded M Breton to leave his €1.3 million (£870,000) a year post as chairman of France Télécom and take over at the Finance Ministry in February. M Breton’s predecessor, Hervé Gaymard, had resigned when it emerged that taxpayers were paying the £10,000 a month rent for his luxury flat in Paris.

On Monday, as M Breton was delivering a speech to the United Nations in New York, police officers, accompanied by an investigating magistrate, searched his office and computer at the Finance Ministry and also his Paris home.

A judicial inquiry was launched into Rhodia last year after two shareholders — Hughes de Lasteyrie, a Belgian financier, and Edouard Stern, a French banker — filed a lawsuit accusing the firm of false accounting.

They said that there was a deliberate attempt to hide environmental and pensions liabilities when Rhodia was spun off from Rhône-Poulenc, the French industrial chemicals group.

In February, Stern was found shot dead at his penthouse in Geneva. His lover has been charged with his murder.

But Mr de Lasteyrie has continued to press his claims. He says that Rhodia acted illegally over the £526 million purchase in 2000 of the British cleaning fluids company Albright & Wilson. Mr de Lasteyrie says that the French group used a third party in a complex deal designed to keep Albright & Wilson’s liabilities from appearing in its annual accounts.

Mr de Lasteyrie’s lawsuit goes on to claim that Rhodia hid the parlous state of the finances of its American subsidiary, ChiRex, between 2001 and 2003.

He says that M Breton was aware of the false accounting as head of Rhodia’s audit committee, and should have stopped it.

But yesterday the Finance Minister said that he was “flabbergasted” at the police raid on his offices.

“Nothing that was brought to my attention on the board by the management, the directors or the auditors was contrary to my code of ethics or my rigorous approach.

“At the time, I was just a board member and four years later I have become minister. By the wave of a magic wand, I have become the Rhodia affair. It’s amazing, don’t you think?”

He rejected claims by the opposition Socialist Party that his appointment as Finance Minister during an investigation into his actions in the private sector had led to a conflict of interest.

“I don’t have any personal interest in this. For there to be a conflict of interest, there has to be an interest in the first place — and there isn’t one,” he said.

M Breton is also linked to a judicial inquiry into the 2002 sale by Vivendi Universal of a subsidiary to Thomson Multimedia, which he headed for five years from 1997. “That’s a completely different subject,” he said, adding that he was not at the firm when the deal was finalised.

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