Fortis executives did mislead investors over solvency, rules court

The former CEO and finance chief of financial services group Fortis did mislead investors in 2008 by giving them wrong information about the bank’s solvency, a court in Utrecht ruled on Wednesday.


A group of investors began legal action against Jean-Paul Votron and CFO Gilbert Mittler after the executives assured investors the bank was safe and measures to strengthen its solvency were proceeding as planned.
The investors claim they lost over €1.5m when Fortis was forced to issue new shares to strengthen its position, which watered down their own stakes.

Statements

The court ruled Votron and Mittler are guilty of making wrongful statements. They and the bank itself, are liable to pay the investors compensation, the court said in a statement. Details of the settlement still have to be determined.
Maurice Lippens, president of the supervisory board, was found not guilty because he was too far-removed from everyday events at the bank, the court said.
NRC journalist Philip de Wit said the ruling is ‘spectacular’. ‘This is the first time a court has ruled investors were misled and that former executives are liable,’ he said.
Ageas, the new name for the remains of the Fortis group, said in a statement it ‘regrets this judgement and will lodge an appeal against it with a view to protecting the interests of its stakeholders’.
Fortis is embroiled in two other court cases following its nationalisation in October 2008, in the wake of the takeover battle for ABN Amro.
Earlier stories
Dutch Fortis nationalisation was necessary

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