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Fortis Shareholder Revolt

The Fortis shareholders’ meeting in Ghent, Belgium was stopped for half an hour, according to Radio Netherlands, after the Tuesday meeting descended into chaos. Shareholders angry at the proposed sale of Fortis Bank to French BNP Paribas threw shoes, coins and ballot boxes at management and demanded the board’s resignation.

The revolt was led Lawyer Mischael Modrikamen, who claims that the deal is contrary to Belgian company law and should be restricted to those who held shares before October. Management’s position is that they cannot exclude recent shareholders from joining the vote. A Belgian court had also rejected Modrikamen’s request earlier on Tuesday and so 170 million shares were cleared to vote on the transaction. In all, Modrikamen represents 2,400 shareholders and amongst his allegations are that the third largest shareholder, one of the new investors, is a Cayman Island-based fund run by a French official close to BNP Paribas.

Opponents of the deal have successfully stalled the BNP sale until now, winning a legal battle that ordered Fortis to consult shareholders ruling that the government was wrong to sell parts of the bank without permission. This decision led to the collapse of the Belgian government and secured a “no” from shareholders in February.

Although Fortis’ banking operations are now in the hands of the Belgian government, shareholders must still vote on the sale after the court ruling. Estimates were that around 25.8 of shares were represented at the meeting but this was not sufficient to vote down the proposals. For the deal to be fully approved, a majority of shareholders at a second meeting in the Dutch city of Utrecht on Wednesday must also vote in favour. It is likely that the outcome will be very similar however, as shareholders can vote at both meetings. Pierre Nothomb of the shareholder protection group Deminor asked the Chairman to proceed with vote and let the Belgian court rule later on whether the vote is valid.

What do you think?