France to tax Societe Generale if Jerome Kerviel wins case

Societe Generale can face 2.2 billion euros in tax deductions since it had benefitted from the same earlier in 2010.

The government of France has indicated that if the verdict from a court of Appeals were to rule that Jerome Kerviel, an ex-trader, need not pay damages for losses he cause, it would reclaim a 2.2 billion euros tax deduction from the Societe Generale.

In October 2010, Kerviel was sentenced to three years in prison after he was convicted by a court in Paris for breach of trust and fraud for over 4.9 billion euros arising out of losses from trading in equities and derivatives in 2008.

Although initially, Kerviel was ordered to repay the entire sum subsequent rulings diluted that down. Earlier in June, a public prosecutor had argued that the bank “had left the door open” for Kerviel to act illegally.

The Versailles Court of Appeal will now pronounce its judgement as to the quantum, if any, of damages payable by him.

“We will act on the court judgments as soon as we know what they are,” said Junior Budget Minister Christian Eckert on Europe 1 radio.

An analyst at Kepler Cheuvreaux in a note to clients had noted that a repayment of the entire amount of 2.2 billion euro, could put SocGen’s 2016 dividend at risk since it had then benefitted from a tax break.

($1 = 0.8927 euros)

Categories: Entrepreneurship, HR & Organization, Regulations & Legal, Strategy


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