Societe Generale CEO holds job
PARIS (AP) - January 30, 2008 The decision came as the Bank of France chief said the bank did
not always properly follow up on warnings about an alleged rogue
trader.
The board unanimously asked Bouton and co-chief executive
officer Philippe Citerne to continue to lead the company,
spokeswoman Laura Schalk said.
The board "confirms its confidence" in Bouton and Citerne,
independent board member Jean-Martin Folz told reporters outside
company headquarters.
Also Wednesday, the set up an independent committee, headed by
Folz, to investigate billions in losses that the bank blames on a
single trader.
PricewaterhouseCoopers will assist in the probe, the bank said
in a statement. It will examine the cause and size of the trading
losses and look into whether the bank accurately relayed
information about the scandal.
Bouton offered to resign as the trading crisis unfolded last
week. The bank said it lost 4.82 billion euros ($7.09 billion)
unwinding the trades of 31-year-old Jerome Kerviel, who is under
investigation.
Bouton said before the meeting that his offer remained on the
table.
Several hundred bank employees poured out of its headquarters to
defend Bouton in an impromptu demonstration during the board
meeting, saying his departure would only make things worse.
The board meeting was to be followed by a gathering of bank
employees, worried about their jobs and the fate of one of Europe's
most respected banks.
Meanwhile, the French Senate began hearings Wednesday of the
head of financial market regulator AMF and the director of the Bank
of France, about how Societe Generale could have gotten in such a
tangle.
The bank's management is also facing new accusations by Kerviel,
who told investigators that his bosses turned a blind eye to his
questionable trades as long as he brought in money for the bank.
Amid concerns that a gem of France's banking industry is in
jeopardy and vulnerable, Prime Minister Francois Fillon said
Tuesday his government will seek to block any hostile bid for the
bank.
Government spokesman Laurent Wauquiez said Wednesday, "If at
some point there needs to be extra financial support for Societe
Generale, it must be done as much as possible in the interests of
the French banking industry."
That prospect raised eyebrows in Brussels, where the EU internal
markets commissioner cautioned France on Wednesday to treat
potential bidders for Societe Generale equally and without regard
to national interests.
"The same rules apply as in other takeover situations under
free movement of capital rules. Potential bidders are to be treated
in an undiscriminatory manner," Charlie McCreevy said in a
statement through his spokesman.
Analysts are also speculating about the dismantling of Societe
Generale, with its units being divided up among other leading
banks.
Analysts say France's largest bank and Societe Generale's chief
competitor, BNP Paribas, would be the most likely buyer of all or
part of the struggling bank. Other names mentioned include French
rival Credit Agricole, Britain's HSBC Holdings, Germany's Deutsche
Bank AG, Spain's Banco Santander SA and Italy's UniCredit SpA.
BNP chief financial officer Philippe Bordenave, speaking as the
bank announced a drop in fourth-quarter profits for 2007 on
Wednesday, refused to comment on Societe Generale's future.
(Copyright 2008 by The Associated Press. All Rights Reserved.)