Liliane Bettencourt (88), heiress to the L'Oreal cosmetic giant, has been deemed by a French judge to be unfit to manange her fortune.
Management of her €16 billion estate has been temporarily turned over to her estranged daughter, Francoise Bettencourt-Meyers by a French court.
Judge Stephanie Kass-Danno granted Ms Bettencourt-Meyers's petition for a guardian to look after her 88-year-old mother's affairs at a private court hearing in Courbevoie, saying she lacked sufficient mental capability to take care of herself.
Ms Bettencourt, France's third-richest person, will appeal the ruling, said her lawyer Jean-Rene Farthouat, calling the decision "contrary to good sense".
The ruling is the latest development in a longstanding feud between Ms Bettencourt and her daughter, who claimed her mother was being manipulated by her entourage, including aphotographer she gave gifts totaling about €1 billion.
Tethys, the Bettencourt family holding company, will continue to exercise the family's L'Oreal voting rights, Bettencourt Meyers and her sons said in an e-mailed statement.
The court asked Ms Bettencourt-Meyers to oversee her mother's assets and her eldest son to look after his grandmother's physical well-being, said Charlotte Robbe-Phan, Ms Bettencourt-Meyers' lawyer. "We are very comforted by the decision."
Today's decision does not change a 2004 accord between the Bettencourt family and Nestle SA, which owns 29.6 percent of L'Oreal, Ms Bettencourt Meyers and her sons said in the statement.
Ms Bettencourt and the world's largest food company gave each other right of first refusal over their stakes that runs to the end of April, 2014. The Bettencourt family owns 30.85 per cent of L'Oreal.
L'Oreal shares rose as much as €2.67, or 3.4 per cent, to €81.17 in Paris trading and were at €80.60 as of 12.30pm in Paris.
The mother and daughter have fought for years over whether the heiress is fit to govern her fortune, estimated at $23.5 billion by Forbes magazine in March, making her the world's 15th-richest person. Ms Bettencourt's father founded L'Oreal in 1909 and she and her daughter's family hold almost 31 per cent of the company, the world's largest cosmetics-maker.
The question of Ms Bettencourt's mental fitness has put into question her role on the L'Oreal board as well as the management of her estate. Ms Bettencourt-Meyers initiated her legal case in 2007, after becoming concerned an artist friend of her mother's had manipulated her to secure €1 billion worth of gifts, including art, real estate and insurance policies.
Investigating judges in Bordeaux, France, are looking into whether Ms Bettencourt has been abused by her advisors and friends, as well as other issues, including possible political campaign finance violations.