The Dutch government’s decision not to compensate investors for shares valued at zero euros when SNS Reaal was nationalised in February may have been wrong, a Dutch court indicated on Thursday.

Finance minister Jeroen Dijsselbloem said at the time the shares were worthless because the bank would have gone bankrupt if the state had not intervened.

But the company court said in a statement on Thursday the zero valuation may not have been correct and had not been properly substantiated. The court is now to appoint investigators who will assess what level of compensation bond and shareholders should be given.

Share price

The investigators will take into account what a bidder would have paid for the company and share prices prior to the nationalisation process. In total, investors lost some €1.3bn when the company was taken over by the state and all the shares expropriated without compensation.

The Dutch investors’ association VEB said it is ‘extremely satisfied’ with the ruling. The VEB represents more than 8,000 SNS investors.

Earlier on Thursday, SNS offered to pay compensation to subordinated bond holders, who ‘had not been properly informed of risks associated with buying participation certificates sold in June 2003,’ SNS said in a statement. The package was valued at €51m.

However, as the Financieele Dagblad pointed out in an editorial, the bill for the compensation will be indirectly picked up by the taxpayer.

Bonuses

However, bonuses paid to SNS directors responsible for the purchase of the bank’s property portfolio, which led to its downfall, cannot be clawed back, finance ministry lawyers have concluded. The bonuses were paid for meeting ‘general and strategic targets’ and are not limited to the property buys.

‘This makes an order to claw back the bonuses based on the purchase of Property Finance unlikely to be successful,’ finance minister Dijsselbloem said in a briefing to MPs.