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UPDATE 2-Ex-Fortis CEOs fined for misleading markets
June 19, 2013 / 7:41 AM / 4 years ago

UPDATE 2-Ex-Fortis CEOs fined for misleading markets

* Ex-CEOs Votron, Verwilst receive fines, say will appeal

* Regulator rules Fortis misled markets in May-June 2008

* Ageas fined 500,000 euros, also plans appeal (Recasts with CEO fines, adds quotes)

By Philip Blenkinsop

BRUSSELS, June 19 (Reuters) - Two ex-chief executives of former financial services group Fortis were fined by the Belgian regulator on Wednesday for failing to inform markets properly in the run-up to the company’s 2008 collapse.

Jean-Paul Votron, Fortis chief from October 2004 to July 2008, said he had received a fine from the regulator, without saying how much, while Herman Verwilst, Fortis deputy CEO until he succeeded Votron, was fined 250,000 euros ($334,800).

Both challenged the regulator’s findings and plan to appeal against the fines.

The regulator also imposed a 500,000 euros fine on Ageas, the Belgian insurance company left over after Fortis was carved up. The company said it too would contest the ruling at the appeals court in Brussels.

Fortis, once one of Europe’s largest banks, got into trouble after paying a top-of-the-market 24 billion euros to buy the Dutch operations of banking group ABN AMRO just before the financial crisis struck.

Shareholder groups have complained that Fortis repeatedly assured investors that its balance sheet was strong and it would not change its dividend policy. But at the end of June 2008, Fortis scrapped its interim dividend and sold new shares to prop itself up.

The regulator ruled that Fortis had communicated too late or incorrectly between May and June 2008 on the remedies required by the European Commission related to the ABN AMRO deal and on its future solvency.

Votron said many people within Fortis had had to clear the company’s communications with the market and that the CBFA, the precursor to the FSMA, had also been involved.

“I never got any complaint from these guys about communication at any point of time in 2008, so I feel particularly astonished about such a judgment,” he told Reuters.

“Why is it that five years after the fact, they suddenly find the CEO... said something wrong on a particular day,” he said.

A Dutch civil court last year found Votron and ex-finance director Gerald Mittler had misled shareholders from May to June 2008, but cleared Chairman Maurice Lippens. Both have appealed and the case is pending.

Fortis was finally split up in October 2008, a week after a 11.2 billion euro capital injection failed to calm markets over its finances. The Dutch nationalised Fortis’s activities there, while BNP Paribas bought a majority in Fortis’s Belgian banking operations.

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. ($1 = 0.7467 euros) (Editing by Jane Merriman and David Holmes)

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