It's hard to find anybody in France who feels sorry for Jean-Marie Messier, the self-promoting former head of Vivendi Universal, who tried to turn the onetime water utility into a glitzy worldwide media giant and ended up driving it to the brink of bankruptcy. But after Messier was held in jail for 36 hours recently by magistrates who opened a formal criminal investigation against him, the big question is no longer how inept he's been. It's whether he was solely responsible for Vivendi's near downfall or is just taking the fall for the failings of the French business establishment.

After 20 months of investigation, the two magistrates on the case, Henri Pons and René Cros, are focusing on three major allegations: that Messier used false information to make Vivendi's accounts look better than they were; that he manipulated Vivendi stock by launching a huge share buyback after Sept. 11, 2001; and that his j21 million severance contract, since canceled, amounted to embezzlement. Messier, who was freed last week on bail of j1.35 million, denies any wrongdoing. Under French law, being placed under judicial investigation is one step from being formally charged. But Messier said in March that he would welcome such a probe because it would enable him to defend himself; the formal declaration allows him access to all the evidence collected by the two magistrates.

The sight of Messier in custody inevitably provoked feelings of schadenfreude — after all, in his glory days Messier lived in a swank Manhattan penthouse bought with Vivendi's money. Yet some of his critics are arguing that he's not the only problem. Whether or not he's guilty of criminal wrongdoing, they say, he was abetted by a Vivendi board that didn't do its job and by French regulators who turned a blind eye. "He's become the scapegoat of everyone who played a role," says Colette Neuville, a leading shareholder activist who frequently sparred with Messier while he was running Vivendi. "Nobody tried to hold up a stop sign in front of Messier. And what's worrying is that if another Messier were to come around today, it's not certain anybody would hold up a stop sign in front of them, either."

Take, for example, the magistrates' allegations about stock manipulation. Stocks worldwide were hammered after the Sept. 11 terrorist attacks, and Vivendi was no exception. In the U.S., the Securities and Exchange Commission, eager to calm the markets, immediately waived its restrictions on stock repurchases. But in France, the Commission des Opérations de Bourse, or cob, didn't go as far, and Messier's decision to spend more than j1 billion buying back 21 million shares breached some of its rules. The firm repurchased stock in a prohibited period shortly before it issued results, and ended up holding more than the legal limit of 10% of its own shares. Messier said he initiated the buyback "in the interest of nonspeculating shareholders." The regulator has since said it let the matter pass because the times were exceptional.

But the magistrates are now treating the sale as possible share manipulation, a criminal offense. Indeed, one of four other people under investigation in the affair is

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nginx/1.14.0 (Ubuntu) Philippe Guez, a former official at Deutsche Bank who carried out the stock transactions for Vivendi. (The three others worked at Vivendi, including former Chief Financial Officer Guillaume Hannezo.) And there may be repercussions for the regulators themselves. The initial spark for the investigation was a complaint filed by small Vivendi shareholders. Frédérik-Karel Canoy, the lawyer for the group, tells Time that he has now filed a follow-up demand for a formal investigation of the cob's president and general manager, both of whom are still in office. The cob, since renamed the Financial Market Authority, didn't respond to requests for comment.

Vivendi's accounting is just as controversial. The magistrates' investigation asserts that Messier gave an overly rosy picture of the group's finances by including the profits and healthy cash flow of two telephone companies — Cegetel and Maroc Telecom — that it didn't fully control. Messier says the board, Vivendi's auditors and regulators all signed off on the accounts. And the company continues to count the two phone subsidiaries, with the regulator's approval.

And what of the 12 directors who sat on Vivendi's board, which signed off on most of Messier's adventures? "The directors aren't choirboys," says Canoy. "They should be sanctioned, too, because they let Messier get away with this." The board has been thoroughly reshuffled since Messier was replaced by Jean-René Fourtou in July 2002. The company declines comment. Still, by focusing all the attention on Messier, "we're just kicking a man who's down," Neuville says. "To have real corporate governance in France, we need to examine all the causes of the disaster."

• PETER GUMBEL | Paris
• Former Vivendi boss Messier is in hot water. But some say he's a symptom of much graver corporate ills