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SocGen shareholders not told about £127m ‘fraud’
Business digest: French bank owned 50% of Russian subsidiary Rosbank, but failed to report their losses
FRENCH bank Société Générale was the victim of a £127m "fraud" in December 2007 which it never told its shareholders about, despite nearly as much shareholders' money being used to remedy the situation.
The "fraud" occurred in a Swiss branch of the SocGen-owned Russian subsidiary Rosbank following problems involving the Iranian steel trading group Safa Industrial, The Daily Telegraph reports. No wrongdoing was ever established on the part of Safa by Rosbank.
At the time, the loss was reported as a "fraud" in Rosbank's annual report, but SocGen failed to include it in their annual report, despite owning 20% of the Russian bank. In 2008, Rosbank reported that it had used SFr174.7m of shareholders' money as a cash injection to plug the hole. SocGen owned 50% of the bank by this time, but still did not report it.
The loss was originally discovered just weeks after SocGen was hit by losses of €4bn due to the actions of rogue trader Jerome Kerviel.
Read a full report at The Daily Telegraph. ·
