SNS Reaal Investors Challenge Dutch Central Bank Capital OrderCorina Ruhe
Four investors in SNS Reaal NV challenged a Dutch central bank decision ordering the lender to boost its capital, saying that wrongfully triggered the government’s decision to seize their securities.
The central bank ordered SNS Reaal on Jan. 27 to close a capital shortfall of at least 1.84 billion euros ($2.4 billion) caused by losses on real-estate loans. On Feb. 1, the Finance Ministry announced that the bank would be nationalized after it missed the Jan. 31 deadline.
The central bank misinterpreted banking supervision law, Jeroen Wendelgelst, a lawyer for the investors, wrote in a complaint dated Feb. 26 seeking restitution. The order was unjustified because the law allows the central bank to raise the minimum-capital requirement, not to demand an increase in capital, he wrote. Wendelgelst declined to identify his clients when contacted by Bloomberg News.
The Amsterdam-based central bank confirmed receipt of the complaint. “We will look into it,” bank spokesman Tobias Oudejans said by telephone.
The Netherlands’ top administrative court upheld the government’s seizure of SNS Reaal’s shares and subordinated loans because without such action the bank would probably have gone bankrupt, the Council of State said on Feb. 25.
Under Dutch law, complaints regarding the central bank must be made first to the bank itself. The central bank’s response can be appealed in administrative court.