Societe Generale SA provided “full transparency” about a 1.7 billion-euro deferred tax credit it received because of the 4.9 billion-euro 2008 trading loss from Jerome Kerviel, the bank’s lawyer said.
“It is defamatory to claim that Societe Generale had lied to the court about its loss,” Jean Veil, a lawyer for the bank, told Europe1 radio yesterday.
Societe Generale confirmed his statement and released details on the tax credit, reported as early as August 2008, to refute comments by Kerviel’s lawyer Olivier Metzner to France Info radio on Oct. 9. Metzner said the bank “voluntarily, fraudulently tricked the court” by not figuring the credit into its calculation of the loss.
The dispute over the size of Societe Generale’s loss comes less than a week after a Paris criminal court ordered Kerviel, 33, to repay the full 4.9 billion euros. A Societe Generale spokeswoman said the next day the bank was willing to negotiate a reduction in the award, which is being appealed together with Kerviel’s three-year jail sentence.
“They should have asked for an amount that took into account” the tax credit, Metzner said in a telephone interview today. “Therefore they misled the court.”
Any revision to the damages award will be up to the appeal court, Metzner said. He hasn’t been contacted by the bank or its lawyers about the proposed negotiation, he said.
Kerviel amassed 50 billion euros in unauthorized positions, concealed with faked hedges. The Paris-based bank discovered the trades in January 2008 and decided to unwind the bets over three days, resulting in the loss. The court rejected his defense that the bank knew about and encouraged what he was doing, holding Kerviel solely responsible. He was convicted of breach of trust, forgery and computer hacking.
The 4.9 billion-euro figure is the difference between the 6.38 billion euros it lost unwinding the positions and Kerviel’s 1.47 billion-euro trading profit in 2007.
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