New twists ahead in SocGen case
A new court battle will be held Monday over the detention of French rogue trader Jerome Kerviel while Societe Generale is to soon launch an eight billion dollar capital increase to cover the losses they blame on him.
By Agencies |
PARIS: A new court battle will be held Monday over the detention of French rogue trader Jerome Kerviel while Societe Generale is to soon launch an eight billion dollar capital increase to cover the losses they blame on him. The decision by a Paris appeals court on Friday to back a prosecution demand that the 31-year-old trader be held in custody was the latest twist in the worst investment banking scandal in history.
His lawyer, Elisabeth Meyer, said she would go to a higher appeals court on Monday. The prosecution said Kerviel could influence any accomplice or witness and at the same time as the hearing was held, police questioned a broker at a Societe Generale subsidiary through which Kerviel handled many of his tens of billions of dollars in European share trades. The broker was released on Saturday but remains an assisted witness, meaning he could still face charges.
Societe Generale has blamed Kerviel for E4.82 billion ($7.1 billion) of losses from unauthorised trades worth at least E50 billion ($73 billion). He faces charges however of breach of trust, fabricating documents and illegally accessing computers.
France���s Financial Markets Authority (AMF) was to meet Friday to consider Societe Generale���s planned E5.5 billion ($8.1 billion) capital increase to cover the loss and some of the two billion euros lost on the US subprime loan market. If it approves, Societe Generale chairman Daniel Bouton could launch the capital increase in coming days.
The French bank has been shaken to the core since suspicions about Kerviel���s trades were first raised on Friday, January 18. Before the weekend was over, the bank was in ���potentially mortal��� danger and the Bank of France had agreed a secret resuscitation plan. According to official statements and Societe Generale���s own account, the bank questioned Kerviel on Saturday.
Early on Sunday afternoon, the bank had enough information to estimate the damage: the E50 billion in market exposure far exceeded its shareholder funds. Bouton informed the governor of the French central bank, Christian Noyer, who authorised him to unwind the contracts.
His lawyer, Elisabeth Meyer, said she would go to a higher appeals court on Monday. The prosecution said Kerviel could influence any accomplice or witness and at the same time as the hearing was held, police questioned a broker at a Societe Generale subsidiary through which Kerviel handled many of his tens of billions of dollars in European share trades. The broker was released on Saturday but remains an assisted witness, meaning he could still face charges.
Societe Generale has blamed Kerviel for E4.82 billion ($7.1 billion) of losses from unauthorised trades worth at least E50 billion ($73 billion). He faces charges however of breach of trust, fabricating documents and illegally accessing computers.
France���s Financial Markets Authority (AMF) was to meet Friday to consider Societe Generale���s planned E5.5 billion ($8.1 billion) capital increase to cover the loss and some of the two billion euros lost on the US subprime loan market. If it approves, Societe Generale chairman Daniel Bouton could launch the capital increase in coming days.
The French bank has been shaken to the core since suspicions about Kerviel���s trades were first raised on Friday, January 18. Before the weekend was over, the bank was in ���potentially mortal��� danger and the Bank of France had agreed a secret resuscitation plan. According to official statements and Societe Generale���s own account, the bank questioned Kerviel on Saturday.
Early on Sunday afternoon, the bank had enough information to estimate the damage: the E50 billion in market exposure far exceeded its shareholder funds. Bouton informed the governor of the French central bank, Christian Noyer, who authorised him to unwind the contracts.
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