The Ondernemingskamer in Amsterdam (Dutch Companies and Business Court) today partly upheld Fortis N.V. mismanagement allegations. Ageas announces it will appeal the decision.
During the first phase of the proceedings initiated by representatives of Fortis shareholders, including the Dutch shareholders association VEB, following the dismantlement of the former Fortis group in 2008, the Ondernemingskamer ordered an inquiry into the management and the business course of Fortis N.V. during 2007 and 2008. The report of the Dutch investigators was issued on 16 June 2010 and is available on the Ageas website:
http://www.ageas.com/Documents/NL_final_report_dutch_investigation_20100616.pdf
During the second phase of the proceedings, VEB asked the Ondernemingskamer, also on the basis of the investigators' report, to rule that there was mismanagement in the period from September 2007 up to and including September 2008 and to nullify the decision of the general shareholders meeting of Fortis N.V. to discharge the Board of Directors for its management during 2007.
Today the Ondernemingskamer partly rejected, but at the same time partly upheld, the VEB requests stating that in certain matters there was mismanagement.
Subsequently, the Ondernemingskamer nullified the decision of the general shareholders meeting of Fortis N.V. to discharge the Board of Directors for its management during 2007 relating to the communication on the subprime portfolio in the prospectus and trading update.
In short, the Ondernemingskamer considers that there was mismanagement in respect of the following:
- the assessment and implementation of future measures to maintain and improve the solvency position of the former Fortis group;
- the information provided by Fortis concerning the so-called subprime exposure in the prospectus and trading update of September 2007;
- the communication concerning the so-called EC remedies imposed upon the takeover of ABN AMRO;
- the information provided by Fortis regarding the transaction with Ping An as of 19 September 2008;
- the communication during May - June 2008 on the progress of Fortis' solvency plan and the achievement of its solvency targets;
- the publication of the decision to implement additional solvency measures as announced on 26 June 2008;
- the publication of information on Fortis's liquidity and solvency position on 26 September 2008.
However, the Ondernemingskamer rejects alleged mismanagement in respect of:
- the decision in 2007 to bid for ABN AMRO;
- the decision not to invoke the so-called MAC (Material Adverse Change) clause with respect to the bid for ABN AMRO in 2007;
- the impairments on the structured credit portfolio communicated on 29 September 2008.
Ageas acknowledges the ruling of the Ondernemingskamer. As Ageas does not concur with all conclusions drawn by this ruling, it will now prepare for filing an appeal with the Supreme Court of the Netherlands. Therefore and pending the judgment of the Supreme Court the decision of the Ondernemingskamer is not final.
Ageas emphasizes that any claim for damages by former Fortis shareholders is not a matter for the Ondernemingskamer and consequently Ageas has not been ordered to pay any damages.
The full text of the judgment is published on www.rechtspraak.nl
Ageas is an international insurance company with a heritage spanning more than 180 years. Ranked among the top 20 insurance companies in Europe, Ageas has chosen to concentrate its business activities in Europe and Asia, which together make up the largest share of the global insurance market. These are grouped around four segments: Belgium, United Kingdom, Continental Europe and Asia and served through a combination of wholly owned subsidiaries and partnerships with strong financial institutions and key distributors around the world. Ageas operates successful partnerships in Belgium, UK, Luxembourg, Italy, Portugal, Turkey, China, Malaysia, India and Thailand and has subsidiaries in France, Hong Kong and UK. It is the market leader in Belgium for individual life and employee benefits, as well as a leading non-life player, through AG Insurance, and in the UK, it has a strong presence as the third largest player in private car insurance and the over 50's market. It employs more than 13,000 people and has annual inflows of more than EUR 17 billion.
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