[quote]lixy wrote:
Loose Tool wrote:
Has Belgium disintegrated yet?
Surprisingly not, considering how tolerant it is vis a vis separatists.
How is that relevant to the thread?[/quote]
Separatist aren’t all they have to worry about.
Belgium’s Government Offers to Resign Over Fortis
By JOHN W. MILLER
BRUSSELS – A challenge to one of the earliest bank bailouts of the global financial crisis led Belgium’s government to offer to resign Friday, after the country’s top court said cabinet ministers tried to influence a judge to allow the sale of assets of troubled Fortis NV to BNP Paribas SA of France.
The political turmoil here offers the clearest case of political fallout from the ongoing financial crisis, as bank bailouts constructed hurriedly, often in late-night and weekend deals, have come under scrutiny.
The problems Belgium faces with the Fortis deal may prove unique, however, bankers and analysts say.
[Belgian Prime Minister Yves Leterme offered to resign Friday after a court said cabinet ministers sought to sway a legal ruling on the future of Fortis.] Reuters
Belgian Prime Minister Yves Leterme offered to resign Friday after a court said cabinet ministers sought to sway a legal ruling on the future of Fortis.
Friday’s report by an investigative judge from Belgium’s supreme court accused the justice minister and prime minister’s chief of staff of phoning the husband of a judge in a case challenging the ?14.5 billion (about $20 billion) Fortis sale, in an effort to sway her. The justice minister on Friday admitted making the phone calls and resigned, but denied he was attempting to influence the case.
Friday’s resignation offer by Prime Minister Yves Leterme over the report brings further instability to Belgium’s government, which struggled for nine months until March to secure a coalition in the face of disputes between the country’s French and Dutch-speaking communities.
Belgium’s King Albert II, who must decide whether to accept the prime minister’s resignation, was in talks with political parties last night. The king rejected a previous offer by Mr. Leterme to step down in July because of difficulties forming a new government in Belgium’s fragmented parliament.
[Fortis graph]
The Fortis bailout plan, which when formed in early October was the biggest of the crisis so far, ran into trouble on Dec. 12. That’s when a three-judge appeals court panel including Christine Schurmans ruled in favor of minority Fortis shareholders trying to block the sale of its Belgian insurance assets to BNP.
The court said the government should have given the shareholders a say in the October deal with BNP. The court also ruled that Fortis must hold a shareholders’ vote on the deal in February, forcing at least a two-month delay in the sale.
The French bank, which expected to buy Fortis’s Belgian banking and insurance businesses, says it still wants to go through with the plan. BNP, however, had to cancel a vote on the purchase at an extraordinary general meeting scheduled for Friday. Analysts worry the shareholders could seek to revise the deal however, a fear that has driven BNP’s share price down since the Dec. 12 court decision. BNP shares closed at ?30.37 Friday, down 8%.
Fortis shareholders were angered by the Belgian government’s rescue plan, which left them with shares valued at just ?1, down from ?30 in April 2007. That’s when the bank launched its ill-fated joint bid for Dutch rival ABN Amro Holding NV.
“It’s not a good time to sell,” said Georges Ugeux, a former vice president of the New York Stock Exchange, and the minority shareholder’s candidate for chairman of the board at Fortis, said in a telephone interview on Friday. Fortis assets are being undervalued, said Mr. Ugeux, who believes the company should be worth ?3 a share and the bank could survive with state ownership. Fortis shares closed at ?1.12 on the Brussels stock exchange Friday, up 7%.
The government-brokered Fortis sale was one of many national government moves to intervene as the banking sector began to melt down in Europe and the U.K. this fall.
However, other deals haven’t sparked the same level of shareholder revolt or legal actions. Shareholders of major banks rescued in the U.K., such as Royal Bank of Scotland Group PLC, voted to approve the government stakes. Shareholder efforts to derail a government-brokered merger between HBOS PLC and Lloyds TSB didn’t gain any traction. On Dec. 12, HBOS shareholders voted to approve the deal.
The Belgian government’s latest troubles began Wednesday, when investigating judge Ghislain Londers published a letter saying he had found “strong indications” of improper lobbying by the government in the case.
On Friday, Judge Londers published a more detailed report, detailing phone calls by Mr. Leterme’s chief of staff and justice minister to Jan De Groof, the husband of Judge Schurmans on the Fortis case panel.
Earlier Friday, Belgian justice minister Jo Vandeurzen resigned, admitting in a letter that he spoke with Mr. De Groof, though he said he hadn’t known Mr. De Groof was married to Judge Schurmans. Mr. De Groof told the Belga press agency he talked about Fortis with the justice minister, but said the conversations were unrelated to the judicial decision his wife had to make.
Friday’s report was the “smoking gun” that forced Mr. Leterme to offer his resignation, said a member of the prime minister’s cabinet.
