EU opens probe into Dutch Fortis bank’s bailout

9th April 2009, Comments 0 comments

The deal may have been carried out on terms that were not in line with EU rules.

BRUSSELS – The European Commission said on Wednesday it had launched an in-depth probe into the Dutch state's bailout of Fortis Bank Nederland last year on concerns the deal may have broken state aid rules.

The investigation covers the state's takeover of the Dutch banking arm of stricken financial services group Fortis last October and loans to it which the commission said amounted to "tens of billions of euros."

It also covers the Dutch state's takeover of the activities ABN Amro that Fortis had previously purchased, in a deal that saddled the Belgian-Dutch parent company with huge debts that contributed to its spectacular downfall.

Europe's top state aid watchdog voiced concerns that the bailout was carried out on terms that were not in line with EU rules that aim to prevent companies from gaining unfair state support over their rivals.

"The Dutch state was justified in intervening to prevent the bankruptcy of Fortis Bank Nederland, which would have caused a serious disturbance of the Dutch economy," EU Competition Commissioner Neelie Kroes said in a statement.

"However, the commission has to ensure that the rescue aid was limited to the minimum necessary and did not create undue distortions of competition liable to cause problems for banks in other member states," she added.

Meanwhile, a group representing 1,250 Fortis shareholders are demanding compensation from the Dutch state because of the collapse of the company's share price following its nationalization.

RTLZ reports lawyer Adriaan de Gier is blaming finance minister Wouter Bos for shareholders' losses for saying Fortis had been saved when the government nationalised the company in 2008.

But a few days later, Fortis was broken up and the share price fell from EUR 6.53 to EUR 0.87 and thousands of investors who had bought into the bank lost money.

De Gier is claiming EUR 5 in compensation per share.

AFP / Radio Netherlands / Expatica

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