Belgium rejects Ping An demands for compensation over Fortis

2nd December 2008, Comments 0 comments

Belgian Prime Minister Yves Leterme rejects demands by China's second-biggest life insurer Ping An to be compensated for its soured investment in Fortis.

2 December 2008

BRUSSELS - "I understand that there may be disappointment, but investments always carry risks," Leterme said told Dutch-language newspaper De Standaard.

"The Chinese talk about a substantial loss of the shares' value, but this loss of value happened before the government took action," he said.

Ping An holds a nearly five-percent stake in Fortis, but its investment has almost entirely been wiped out since the embattled group was dismantled by the Belgian, Dutch and Luxembourg governments last month.

While the Dutch state has taken over the group's operations in that country, the Belgian and Luxembourg governments are selling Fortis' businesses in their countries to French bank BNP Paribas.

The Chinese insurer considers that it has a right to be compensated under the terms of a 2005 agreement between China and Belgian that allows for compensation in case of nationalisation by one of the two states.

"There is a treaty covering this, but it still hasn't been ratified by the region of Wallonia," Leterme said, in reference to Belgium's southern French-speaking half.


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