Vivendi's Question: What's French for Chad?

Executives at

Hewlett-Packard

(HWP)

may think they've had a tough time with their latest shareholder vote. But they've got nothing on

Vivendi Universal

(V) - Get Report

.

The France-based media conglomerate said Friday that it had found indications of a voting machine malfunction at its

raucous shareholder meeting this week -- a malfunction that appeared to be due to "piracy of the voting system."

Friday's news gives Vivendi Chairman Jean-Marie Messier a second chance to seek shareholder approval of a controversial stock option plan for executives -- a plan that Messier said was essential to attracting and retaining top talent, but which got voted down at the Wednesday meeting in Paris.

Vivendi says it will hold a new shareholder meeting as soon as possible to collect a "reliable" vote. The company also plans to take legal action against the unspecified parties responsible for the piracy.

Although vote-count fraud may be rare among companies publicly traded in the U.S., it certainly fits in with the rowdy mood around the shareholder meeting, where protesters picketed against Messier outside the building and attendees interrupted Messier several times with angry whistles.

The uncertainty regarding the electronically cast votes points up a common criticism of computer-based voting -- that ballots can be manipulated as easily as they have been the old-fashioned way, if not more easily.

The meeting Wednesday came amid controversy over the firing of Pierre Lescure, the popular chief executive of Canal Plus, Vivendi's unprofitable pay-television unit, and growing doubts about Messier's acquisition strategy. Vivendi shares have dropped nearly 50% since the company's buys of Seagram and Canal Plus in late 2000.

Vivendi said it discovered the irregularities during routine checks following Wednesday's meeting, where 5,000 shareholders rejected a management plan to award stock options to top executives.

That plan ran into fierce opposition from French shareholder activists, who argued that it amounted to rewarding management for steering the company toward the biggest loss in French corporate history. In 2001, Vivendi lost more than $12 billion after a big writedown of acquisition-related goodwill.