- Title: FRANCE: Societe Generale chairman Daniel Bouton fate hangs in the balance
- Date: 30th January 2008
- Summary: EXTERIOR OF ELYSEE PALACE VARIOUS OF FINANCE MINISTER, CHRISTINE LAGARDE, LEAVING ELYSEE PALACE AFTER MINISTERS MEETING WITH PRESIDENT NICOLAS SARKOZY
- Embargoed: 14th February 2008 12:00
- Keywords:
- Location: France
- Country: France
- Topics: Finance
- Reuters ID: LVA85R7QD4DM62Y40Q2NGRRJ2SOZ
- Story Text: Societe Generale chairman Daniel Bouton faces mounting pressure as the bank's board meets in Paris and France's government discusses the financial chaos caused by rogue trading losses.
As the board of Societe Generale was expected to decide on Wednesday (January 30) the fate of Chairman Daniel Bouton for failing to prevent the biggest financial fraud in history, pressure from shareholders and top management kept building for Bouton to face the bank's clean up effort.
Didier Cornardieu, the President of the Association of Small Shareholders (APPAC) which is suing Societe Generale, said Bouton must take responsibility and face the consequences,
"The first consequence would be to stay to address Societe and to pull it out of this crisis with the help of an interim president. Then he should leave after six months but not with a golden handshake,"
Cornardieu said outside SocGen's headquarters in Paris where the board was meeting. APPAC filed a lawsuit against SocGen on Monday (January 28) over the way it lost billions of dollars in the fraudulent share deals.
Bouton offered to resign as soon as the bank uncovered risky positions built up by rogue trader Jerome Kerviel. But the bank's 15-strong board has so far asked him to stay on.
The career of Bouton, the author of a blueprint on how to run a French company, hung by a thread as politicians pressed for top management changes over the scandal which has shaken France's image of itself as the sensible face of capitalism.
As SocGen's board met, French President Nicolas Sarkozy met with his Finance Minister Christine Lagarde and the rest of his cabinet to discuss the bank's crisis.
The government has warned off foreign banks eyeing a take-over of France's second-biggest listed bank.
Minister of Budget, Eric Woerth, said after meeting with Sarkozy on Wednesday that SocGen was not facing a take-over anytime soon.
"I think there is no risk for them," he said.
SocGen said on Jan. 24 it had uncovered massive unauthorised stock trading by one of its employees that led to the world's biggest rogue trading loss.
The bank has been forced to launch a capital increase to raise 5.5 billion euros to cover the losses, as well as a 2.1 billion euro writedown resulting from the subprime crisis.
Jerome Kerviel, a 31-year old junior trader, was placed under investigation for breach of trust and other misdeeds on Monday, but judges threw out the stronger accusation of fraud. - Copyright Holder: REUTERS
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