Page last updated at 22:51 GMT, Tuesday, 27 May 2008 23:51 UK

Societe defends stand on fraud

Societe Generale CEO Daniel Bouton
Mr Bouton said Mr Kerviel's position was concealed

French bank Societe Generale has faced shareholder criticism over its handling of an insider trading scandal.

Chairman Daniel Bouton was heckled by shareholders when he argued that transactions by rogue trader Jerome Kerviel were hidden from management.

The bank blames the trader for a 4.9bn-euro ($7.6bn; 3.8bn) loss, and said it was an "isolated" incident.

But recent investigations - both internal and external - highlighted the lack of key controls at the bank.

An internal report released earlier in May said that managers were "negligent".

And a report by PricewaterhouseCoopers referred to a flawed "general environment" at the bank that enabled Mr Kerviel to accrue such losses.

Speaking on Tuesday at the firm's annual meeting, Mr Bouton said the incident with Mr Kerviel did not "fundamentally call into question the core of Societe Generale's market activities"

But such statements prompted anger from shareholders.

"Who did you take us for?" asked one unnamed shareholder.

The same shareholder went on to say the bank was to blame for the speculation not Mr Kerviel alone.

"You're guilty of having turned the bank into a casino," said a different investor, who was unnamed.

Mr Bouton said the bank was not a casino and that the bank's stock had been among the best performers in the industry during an eight-year timeframe.

In closing comments, Mr Bouton said: "I hope we can now close once and for all this particularly difficult chapter for Societe Generale".

The chairman was under pressure to resign when the scandal came to light but has been given the support of the board.

Societe board backs chief Bouton
30 Jan 08 |  Business

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