Belgium cools Ping An hope for Fortis compensation

BRUSSELS (Reuters) - Chinese insurer Ping An (2318.HK)(601318.SS) should not count on any compensation from Belgium over its losses following the state-led carve-up of financial group Fortis, according to the Belgian government.

"I understand that there is disappointment, but there are always risks bound to an investment," Prime Minister Yves Leterme said in comments in Belgian daily De Standaard.

Ping An Insurance (Group) Co booked a loss of about 15.7 billion yuan ($2.3 billion) on its investment in Fortis NV (FOR.BR)(FOR.AS) after marking down the market value of its 5 percent stake in the Dutch-Belgian group.

Ping An believes the Belgian government's role in dismantling Fortis in October was tantamount to confiscation and it wants the Chinese government to pursue compensation, a Chinese government source told Reuters last week.

Belgian officials met those in charge at Ping An last Friday. A Belgian government spokesman, confirming the comments from Leterme, said Belgium was willing to continue to work with the Chinese group.

"Ping An always believed strongly in the growth scenario of Fortis management, which with hindsight turned out to be a wrong assessment. The Chinese speak of a substantial fall in the value for shareholders, but that fall had already happened before the government intervened," Leterme said.

Shares in Fortis have fallen to less than 1 euro from almost 30 euros in April 2007, when it launched its ill-fated joint bid for Dutch rival ABN AMRO. The shares were above 5 euros before the company was broken up.

Other investors are also protesting against Fortis's breakup and have mounted legal challenges, albeit with limited success.

Ping An, however, could point to an investment protection treaty stipulating compensation should be offered when either of the governments nationalises companies in which firms from the other country have invested.

Leterme commented that the treaty had not been ratified by the Belgian region of Wallonia.

Fortis was carved up by the Dutch, Belgian and Luxembourg governments in October with BNP Paribas (BNPP.PA) buying the Belgian operations after an 11.2 billion euro ($14.49 billion) cash injection failed to calm investor concerns.

The deals left Fortis Group with only its international insurance business and a 66 percent share of a 10.4 billion euro portfolio of structured credit products.

Fortis will hold meetings in the Netherlands on Monday and Belgium on Tuesday when shareholder approval will be sought for an overhaul of the board as well as a mandate to continue the business of the company.

(Reporting by Philip Blenkinsop; Editing by Rupert Winchester)