Dutch Council of State approves SNS Reaal nationalisation
AMSTERDAM Feb 25 (Reuters) - The Dutch Council of State, the body that advises the government and parliament on legislation and governance, ruled that the government was within its rights to nationalise troubled financial group SNS Reaal.
Finance Minister Jeroen Dijsselbloem ordered the $14 billion rescue of SNS Reaal on Feb. 1 after the bank and insurance group failed to raise capital from private investors, saying it was necessary to nationalise it to avoid its collapse and shore up confidence in the financial system.
But the Dutch Association of Shareholders and a group of subordinated bondholders in SNS Reaal challenged the nationalisation after investors had their holdings expropriated.
"Without the minister's intervention, SNS would most likely have gone bankrupt," the council ruled in a statement on Monday.
"The minister was entitled to conclude that the stability of the financial system faced a serious and immediate threat."
On Friday, EU competition regulators gave temporary approval to the rescue plan for SNS Reaal, saying its recapitalisation was necessary for the stability of the Dutch financial system.
The European Commission, which acts as state aid regulator in the 27-member European Union, said in a statement it was approving the state-backed rescue for six months, during which time a restructuring plan would have to be drawn up. (Reporting by Thomas Escritt; Editing by Sara Webb and Helen Massy-Beresford)