Societe Generale tax write off of trader loss sparks anger
A 1.7-billion-euro tax write off that French bank Societe Generale is taking over the rogue trading losses it suffered sparked anger among French politicians Sunday.
"Among all the shocking things in this affair, of which three are many, now we learn that Societe Generale is going to be reimbursed for its lack of vigilance ... in monitoring one of its traders," former Socialist leader Francois Hollande said on Canal+.
"How can it be that if a bank makes a mistake the taxpayers are the ones to pay," he added.
A French court last week found Jerome Kerviel guilty of fraud and breach of trust by carrying out covert stock market deals worth 50 billion euros which were discovered in January 2008 and almost brought down Societe Generale, one of Europe's biggest banks.
On discovering the risky deals Societe Generale was forced to make emergency transactions worth 50 billion euros -- equal to nearly all its shareholder capital at the time -- to balance its books, incurring a loss of 4.9 billion euros.
Societe Generale exploited French tax law to deduct a portion of that loss against its tax bill, resulting in a savings of 1.7 billion euros.
Conservative politician Nicolas Dupont-Aignan said the bank should repay the money saying that "taxpayers shouldn't be made to pay for financial speculation."
"At the moment when tax breaks for young couples and the middle class are being eliminated, the French will be happy to hear that the Public Treasury is offering a 1.7 billion to a bank that has profited greatly from government generosity for the past two years," Dupont-Aignan said in a statement.
Societe Generale said Saturday that it "acted in complete transparency and confomity with tax regulations" when claiming the write off.
© 2010 AFP