BRUSSELS – Belgian prosecutors have concluded that seven former directors of Fortis should face trial for allegedly misleading investors during the Belgian-Dutch bank's purchase of part of Dutch lender ABN AMRO and before its 2008 collapse.
A dossier has been passed to a panel of judges who will determine whether to order a trial, Brussels prosecutors said on Wednesday. They did not name the former Fortis directors.
Ageas, the legal successor to Fortis, said it was pleased that the prosecutors were not seeking to bring it to trial as well. It declined to comment on its former directors.
Allegations by the prosecutors revolve around whether communications to investors about Fortis's exposure to U.S. sub-prime assets were insufficient or too late, such as at the time of a capital increase when Fortis bought part of ABN AMRO.
The seven would be the first in Belgium to face trial over banking failures during the crisis, which also forced bailouts for Franco-Belgian group Dexia and Belgian company KBC .
Fortis, once one of Europe's largest banks, got into trouble after paying a top-of-the-market 24 billion euros ($32 billion) to buy the Dutch operations of ABN AMRO just before the credit crunch struck.
Shareholder groups have complained that former chairman, Maurice Lippens and former CEO Jean-Paul Votron repeatedly assured markets that Fortis's balance sheet was strong and that it would not be changing its dividend policy. Repeated calls to Lippens' home were unanswered.
Votron's lawyer referred to a statement made by Votron in Belgian business daily De Tijd on Wednesday, in which he said that he had never lied to financial markets and that he and Fortis board members had always acted with the greatest possible integrity.
At the end of June 2008, Fortis scrapped its interim dividend and sold new shares to prop itself up.
A Dutch court found Votron and ex-finance director Gerald Mittler guilty last year of misleading shareholders from May to June 2008, but cleared Lippens. Both have appealed and the case is still pending.
Fortis was finally split up in October 2008, a week after an 11.2 billion euro 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.
The remaining Fortis business, renamed Ageas , was left as an insurance group centred on Belgium with life and non-life insurance operations elsewhere in Europe and Asia as well as a host of legacy issues to clear up related to Fortis's collapse.
(Reporting By Philip Blenkinsop. Editing by Jeremy Gaunt.)