Belgian PM hangs on as court weighs in on Fortis breakup row

19th December 2008, Comments 0 comments

Reporters waited outside his offices expecting him to resign over the affair.

BRUSSELS - Embattled Belgian Prime Minister Yves Leterme was thrown a life-line Thursday as a new justice report dampened suspicions that his government pressured judges to back the breakup of Fortis bank.

As reporters waited outside his offices expecting him to resign over the affair, an aide handed out a report by the prosecutor at the Brussels appeal court denouncing irregularities in the tribunal's Fortis ruling on 12 December.

The report suggested the judge had not respected certain procedures.

In a case brought by Fortis' minority shareholders, the appeal court ruled that they should have been consulted on the partial sale of the bank and insurance group to BNP Paribas and froze the deal.

The move left the company's fate in doubt.

Earlier Thursday, opposition parties had called for a confidence vote after Leterme acknowledged "contacts" with justice officials, while denying seeking to influence them.

The speaker of the assembly rejected the calls.

But in a new twist, Belgium's Supreme Court president Ghislain Londers sent the speaker a letter which appeared to condemn Leterme's struggling government.

The letter said: "Everything was done so that the ruling of the ... Court of Appeal would not be given" on the Fortis breakup.

On leaving Leterme's offices late Thursday, Francophone Socialist Deputy Prime Minister Laurette Onkelynx said the new report showed that the judge might have abused his powers, and described the text as "an extremely important new element".

The report "does not mention political pressure at all, it speaks only about a dysfunction at the appeals court," she said, after an emergency cabinet meeting had dragged on well into the night.

Leterme only came to power in March after many months of political crisis and the allegations are a new millstone for a man who has struggled to hold a government together.

The Belgian government is mired in a complex legal battle with minority shareholders of the banking and insurance group Fortis over the sale of its Belgian assets to French bank BNP Paribas.

The group was dismantled in October with the Dutch state taking over its Dutch banking and insurance assets and the Belgian government taking over its Belgian banking business.

In a bid to secure the long-term viability of Fortis and the Belgian banking system, the government then hastily orchestrated the sale of most of the group's Belgian assets to BNP Paribas.

Until the court froze the transaction, the deal was to have gone ahead this week. BNP Paribas acknowledged on Thursday that it "cannot proceed as initially planned".


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