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UPDATE 2-Fortis successor Ageas must compensate misled shareholders -court
July 29, 2014 / 11:03 AM / 3 years ago

UPDATE 2-Fortis successor Ageas must compensate misled shareholders -court

(Adds company statement, share reaction)

BRUSSELS, July 29 (Reuters) - Financial group Fortis, which was carved up in 2008 and superseded by Belgian insurer Ageas , misled shareholders in the run-up to its bailout and should pay them compensation, a Dutch court said on Tuesday.

Fortis, once one of Europe’s largest banks, almost collapsed after paying a top-of-the-market 24 billion euros ($32 billion) for the Dutch operations of ABN AMRO just as the credit crunch struck in 2007.

The Dutch court said Fortis misled shareholders by saying, after a first rescue package in September 2008, that its position was “stronger than ever”.

“Hereby Fortis, which knew the information to be incorrect, gave a misleading signal to the market and put investors on a wrong footing,” the Amsterdam-based court of appeal said in its ruling.

Shares of the group fell as much as 4.6 percent in late Tuesday trading after the ruling was published. Its shares had been suspended earlier pending the ruling.

The court did not say how much Fortis should pay.

Ageas still had three months to appeal against the Dutch ruling, a spokeswoman said. The group so far had not set aside any funds to compensate shareholders, because the amount that would be needed was very hard to quantify, she added.

A separate procedure will now have to be started to determine how much compensation individual shareholders can receive, Adriaan de Gier, the lawyer for the shareholders, said.

He added the case could last about two years.

The court added that the Dutch government had communicated appropriately to the public at the time as it was trying to prevent a run on the bank.

Fortis was finally split up in October 2008, a week after an 11.2 billion euro ($15.03 billion) capital injection failed to calm markets. The Dutch nationalised Fortis’s activities there, while BNP Paribas bought a majority in Fortis’s banking operations in Belgium.

Ageas, the legal successor to Fortis, said it was disappointed with the verdict and was considering its further steps. (1 US dollar = 0.7453 euro) (Reporting by Robert-Jan Bartunek; editing by Louise Heavens)

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