French Economy Minister Christine Lagarde said Societe Generale (SocGen), reeling from losses blamed on a rogue trader, is a bank in crisis and may need to ditch its chairman.
"Societe Generale is in a crisis situation," Lagarde told LCI TV yesterday.
"In a difficult moment, the board members are there to decide if the person in charge is the best placed to run the ship when it is pitching a bit, or whether they should change the captain," she said.
French Prime Minister Francois Fillon said the government would defend SocGen from any hostile takeover.
``The government will not let Societe Generale become the object of hostile raids,'' Fillon said, adding, "The government is very attentive to any risk of destabilization of Societe Generale."
SocGen said last Thursday that it had uncovered massive unauthorized stock trading by one of its employees that led to 4.9 billion euros (US$7.22 billion) in losses at the 144-year-old bank.
Jerome Kerviel, a 31-year old junior trader, was placed under investigation for breach of trust and other misdeeds on Monday, but judges threw out the stronger accusation of fraud made by the bank and prosecutors and freed him on bail. Prosecutors said they would appeal against his release.
Kerviel's lawyers, however, were jubilant.
"There is no fraud, sir. There is no fraud. The word fraud was used by [bank chairman Daniel] Bouton numerous times," lawyer Christian Charriere-Bournazel.
"Mr Bouton held this unfortunate man up for public vilification, threw him to the dogs ... and there was no substance to it," he told reporters late on Monday.
Lagarde's comments put fresh pressure on Bouton to step down after French President Nicolas Sarkozy turned up the heat on SocGen's top managers on Monday evening, saying they would have to accept their share of responsibility for the world's biggest trading scandal.
Lagarde and Justice Minister Rachida Dati have said it was up to the bank's board to decide Bouton's fate. But Bouton's departure would raise a problem of succession because his heir apparent, Jean-Pierre Mustier, heads the investment division that employed Kerviel and has also been damaged by the crisis.
Meanwhile, the bank rejected claims that an American member of its supervisory board, Robert Day, had inside information about the rogue trader losses when he made two major share sales this month.
"No inside information was used in any way with respect to these December and January sales," it said.
In related developments, EU Internal Markets Commissioner Charlie McCreevy said yesterday that no regulatory measures could have prevented the SocGen crisis.
"No regulation in the world could have foreseen what happened last week in France," he told reporters in Brussels.
Later in a speech at a European Financial Services Conference, he said investors would learn to assess the value of their portfolios themselves rather than relying on credit rating agencies.
INSURRECTION: The NSB said it found evidence the CCP was seeking snipers in Taiwan to target members of the military and foreign organizations in the event of an invasion The number of Chinese spies prosecuted in Taiwan has grown threefold over a four-year period, the National Security Bureau (NSB) said in a report released yesterday. In 2021 and 2022, 16 and 10 spies were prosecuted respectively, but that number grew to 64 last year, it said, adding that the Chinese Communist Party (CCP) was working with gangs in Taiwan to develop a network of armed spies. Spies in Taiwan have on behalf of the CCP used a variety of channels and methods to infiltrate all sectors of the country, and recruited Taiwanese to cooperate in developing organizations and obtaining sensitive information
BREAKTHROUGH: The US is making chips on par in yield and quality with Taiwan, despite people saying that it could not happen, the official said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has begun producing advanced 4-nanometer (nm) chips for US customers in Arizona, US Secretary of Commerce Gina Raimondo said, a milestone in the semiconductor efforts of the administration of US President Joe Biden. In November last year, the commerce department finalized a US$6.6 billion grant to TSMC’s US unit for semiconductor production in Phoenix, Arizona. “For the first time ever in our country’s history, we are making leading edge 4-nanometer chips on American soil, American workers — on par in yield and quality with Taiwan,” Raimondo said, adding that production had begun in recent
Seven hundred and sixty-four foreigners were arrested last year for acting as money mules for criminals, with many entering Taiwan on a tourist visa for all-expenses-paid trips, the Criminal Investigation Bureau (CIB) said on Saturday. Although from Jan. 1 to Dec. 26 last year, 26,478 people were arrested for working as money mules, the bureau said it was particularly concerned about those entering the country as tourists or migrant workers who help criminals and scammers pick up or transfer illegally obtained money. In a report, officials divided the money mules into two groups, the first of which are foreigners, mainly from Malaysia
SILICON VALLEY HUB: The office would showcase Taiwan’s strengths in semiconductors and artificial intelligence, and help Taiwanese start-ups connect with global opportunities Taiwan has established an office in Palo Alto, one of the principal cities of Silicon Valley in California, aimed at helping Taiwanese technology start-ups gain global visibility, the National Development Council said yesterday. The “Startup Island Taiwan Silicon Valley hub” at No. 299 California Avenue is focused on “supporting start-ups and innovators by providing professional consulting, co-working spaces, and community platforms,” the council said in a post on its Web site. The office is the second overseas start-up hub established by the council, after a similar site was set up in Tokyo in September last year. Representatives from Taiwanese start-ups, local businesses and
RSS