Question 30526 — banks and financial institutions

Summary

Mrs. Frédérique Dumas draws the attention of the Minister of the Economy and Finance to the judicial information aimed at possible facts of "concussion" linked to the granting and maintenance of a tax advantage for Société Générale. The general tax code provides that companies that are victims of fraud can deduct the losses caused from their taxable results. In the case between Jérôme Kerviel and Société Générale, this the latter was definitively convicted in criminal proceedings in November 2014. In September 2016, the Versailles Court of Appeal considered that breaches and serious deficiencies in the control exercised by Société Générale had given Jérôme Kerviel the possibility of carrying out acts which led the bank to record very significant losses. However, the general tax code and the case law of the Council of State pose in particular as an essential condition for tax deductibility of the loss that companies are not responsible for fraud, through control failures or obvious deficiencies. However, the banking commission specifically imposed a fine of 4 million euros on Société Générale for “serious deficiencies in the internal control system” of the bank in July 2008. In addition, the responsibility of Société Générale being committed, the bank could therefore not deduct the losses in question and therefore reduce the amount of its taxable profits. This is therefore the substantial sum of 2.2 billion euros to be reimbursed to French taxpayers, knowing that the "quantum of the loss attributed without any proof to Jérôme Kerviel has also never really been assessed" as David Koubbi, the lawyer for Anticor and Julien Bayou, points out. At the time, the Minister of Economy and Finance, Michel Sapin, therefore asked the tax administration for a review of the bank's situation, "in the interest of the Treasury and taxpayers", and asked the tax administration to instruct the recovery of Société Générale. This was done in November 2016. In November 2018, Société Générale concluded a series of agreements with the American authorities in order to resolve the dispute which opposed for having violated various embargoes. The bank then had to pay a total amount of around 1.2 billion euros. It was then the second largest fine imposed on a financial institution for this reason. In France, on the other hand, Société Générale has reduced its taxable income for corporate tax and consequently reduced its tax burden; however, no formal reimbursement has yet been made. has taken place to date and there is therefore significant damage for the French taxpayer to the tune of 2.2 billion euros. A judicial investigation targeting acts of “concussion” linked to the granting and maintenance of this advantage was opened by the Paris prosecutor's office several months ago, following a complaint against The 18th May 2020, the anti-corruption association Anticor became a civil party in the current investigation in order to give weight to this case. On May 19, 2020, Société Générale held its general meeting. Its president announced the hiring freeze, the optimization of expenses to transform the bank, additional savings of around 700 million euros for the year 2020. Over the first three months of 2020, Société Générale thus suffered a loss, group share, of 326 million euros. The bank reports losses of 120 million euros linked to two “exceptional” frauds. By counting frauds and “exceptional” fines every year, shareholder confidence has been eroded. On May 19, 2020, Société Générale capitalized barely 10 billion euros despite its 62 billion euros in equity. She doesn't have is the subject of no takeover bid, of no interest in a financial environment where predation is the rule. The deputies therefore learned from the press and without further details that a judicial investigation targeting acts of "concussion" linked to the granting of this tax credit of 2.2 billion euros was opened by the Paris prosecutor's office several months ago. So, she asks him how to explain the total lack of communication from the Company General and State on this subject. What is the status of the recovery proceedings? And in particular, have the adjustments notified to Société Générale been put into recovery? What will be the position of the tax administration in this control or dispute (the tax administration must apply the jurisprudence of the Council of State and contest in principle any tax deductibility in the event of an abnormal management act, being clearly demonstrated by the court decisions which have become final that the bank clearly contributed to the occurrence of its damage). If the key shareholders criticize the State for wanting to take advantage of the crisis and the low valuation of the bank, it could be proposed to issue share subscription warrants at more acceptable price levels. These bonds issued by Société Générale in favor of the State would allow the latter to convert the debt into equity in one or more times. If the share price rises to 17 euros, the dilution of historical shareholders is lower and the State exercises its conversion option for 1.2 billion euros and the balance may be subject to conversion beyond 20 euros. This very classic formula sends a signal of support to employees and the market. The State does not demand its debt and takes the bet of days best at converting your debt. Finally, if the bank carries out a spectacular recovery to the point of being able to pay the debt before the options expire, the State can agree to have its debt paid and not return to the capital. The flexibility of the solution allows the creditor State to reach an agreement whatever happens with the current shareholders. She therefore asks him why such solutions, such avenues, have not been proposed. On October 22, 2013, the Prime Minister, as a deputy, submitted a written question on this subject, and asked, alongside Thierry Solère, Benoist Apparu and Gérald Darmanin, from Pierre Moscovici, then Minister of the Economy and Finance, for explanations on the tax deduction obtained by the Société Générale and which according to them contradicted the jurisprudence of the Council of State. Why have no collections been made? concretely notified to Société Générale, and in particular since he became Prime Minister? Behind the financial communication intended for financial analysts, jobs are threatened and could make the payment of this amount impossible to achieve. Is the Ministry of Economy and Finance therefore incapable of managing this debt? If this is the case, why has the State represented in the capital by the Caisse des Dépôts not proposed the conversion of its debt of 2.2 billion euros into equity through a reserved capital increase? She asks him to please respond to these points.

Machine translation from French. The official text remains authoritative.

Timeline

No timeline events have been ingested for this record yet.

Votes

No vote records are attached yet.

Versions

No version snapshots stored. Document URLs remain at the source.

Documents

No documents linked.

Sponsors

• Frédérique Dumas · auteur

Related records

No cross-record relationships stored yet.