SocGen chairman booed over Kerviel affair

PARIS (Reuters) - Angry shareholders booed the chairman of Societe Generale (SOGN.PA) on Tuesday and likened the French bank to a "casino" after it fell victim to the world's biggest rogue trading scandal.

The showdown came at an annual general meeting five months after SocGen shocked the banking world by unveiling $7.7 billion in trading losses which it blamed on unauthorized stock markets bets by a junior trader, Jerome Kerviel.

"Who do you take us for?" said private shareholder Jean Richard, to rounds of applause followed by boos for Chairman Daniel Bouton, who stared sternly ahead from the podium.

"You're guilty of having turned the bank into a casino," said another private investor, who did not give his name.

Bouton responded that "the bank is not a casino," and brought out slide presentations to show that over an eight-year period, SocGen shares had remained among the best in the sector.

But the assurances failed to quell shareholder anger in a packed conference hall, as investors booed the board and clapped whenever shareholders asked tough questions.

Another private shareholder demanded Bouton's resignation.

Bouton has clung to his job despite criticism from French President Nicolas Sarkozy, though he recently yielded his chief executive role to former SocGen Finance Director Frederic Oudea.

Shareholders also gave a rough ride to SocGen's accountants, Ernst & Young and Deloitte. They booed yet again as a representative told the meeting that he had studied the accounts and found "no anomalies."

Around 1,500 people were present at the meeting, held near SocGen's headquarters in the Defense business district of Paris.

On Jan 24, SocGen unveiled 4.9 billion euros ($7.7 billion) of losses which it said were caused by deals made by Kerviel.

The size of the losses eclipsed those of previous trading scandals, such as Nick Leeson's rogue trades which toppled the venerable British merchant bank Barings in 1995.

SocGen said on Friday that Kerviel may have been helped by an assistant, but added there was no conclusive proof of this.

A mile or two away from the shareholder meeting, Kerviel looked calm and relaxed as he posed exclusively for Reuters Pictures and Television in his home town of Neuilly-sur-Seine, but declined to be interviewed on the trading scandal.

However he recalled the drama of the first few days of an affair which made world headlines, saying he had managed to escape from journalists by hiding in a car with no back seats.

"We drove very cautiously so everything went fine," he said.

The 31-year-old vanished from view for days when the scandal broke but later turned himself in for questioning by police.

Kerviel was freed from prison in March after an appeal against his detention, but he remains under formal investigation for breach of trust, computer abuse and falsification. He has said the bank must have been aware of his trading activities.

POOR SUPERVISION

SocGen has published two internal reports on its own investigations into how Kerviel managed to bypass risk controls to build up a trading position worth 49 billion euros -- more than SocGen's own stock market value.

Its second report published last week blamed weak supervision and poor control systems for the trading scandal. It painted a climate in which managers turned a blind eye to risks.

SocGen did not discover Kerviel's unauthorized trades until January 18, even though the bank's internal reports showed that Kerviel had in 2007 raised alarms with derivatives exchange Eurex and been the subject of more than 70 "alert" warnings.

The losses from the Kerviel scandal made SocGen vulnerable to a takeover bid from rivals such as BNP Paribas (BNPP.PA) and forced the bank to raise 5.5 billion euros in capital to shore up its finances, also weakened by subprime losses.

BNP Paribas, France's biggest listed bank, ultimately ruled out a bid, at least for now. BNP tried to buy SocGen in 1999.

Since the start of the year, SocGen shares have fallen 28 percent, underperforming a sickly European banking sector by 10 percent. They closed at 66.45 euros on Tuesday, valuing France's second-largest listed bank at 31 billion euros.

(Additional reporting by Philippe Wojazer, Antony Paone)

(Editing by Tim Hepher, Rory Channing, Greg Mahlich, Elaine Hardcastle and Dave Zimmerman)