US financier George Soros is one of four men who will go on trial in Paris on Thursday on insider-trading charges relating to a failed take-over bid at the French bank Societe Generale 14 years ago.
The outspoken 72-year-old billionaire and philanthropist has links to South Africa, including funding various developmental projects such as low-cost housing. Soros was also a member of President Thabo Mbeki’s high-powered International Investment Council in 2001.
Soros is accused of using privileged information to speculate in Societe Generale shares in 1988, during an attempt allegedly orchestrated by the socialist government of the time to take control of the recently-privatised bank.
Also on trial are Lebanese financier and middleman Samir Traboulsi (64) former bank director Jean-Pierre Peyraud, (88) and Jean-Charles Naouri, (53) — an aide to the late Socialist finance minister Pierre Beregevoy.
Soros and the others are alleged to have been contacted in 1988 by George Pebereau, president of Marceau investment bank, who — with Beregevoy’s approval — was putting together a consortium to buy up Societe Generale shares.
Though none of them joined the scheme, they are accused of using their knowledge of the planned take-over to speculate in the stock.
Soros’s Quantum Fund made a profit of about one million euros when the shares were later re-sold, according to a report from the French stock-market watchdog, the Commission des Operations de Bourse (COB).
”From the end of June 1988 there was information available that was much more precise than a rational anticipation of the market. But only a small number of people — fewer than 20 — were privy to that information,” said a justice official close to the case.
The investigation has dragged on for more than 12 years ? long even by French standards — largely because of the difficulty successive magistrates have had in accessing bank accounts in Switzerland where they suspected records of the trading were kept.
Many witnesses in the affair have died in the interim — including Beregevoy, who, after serving briefly as prime minister, committed suicide in 1993.
All four accused have pleaded innocent, and their lawyers are expected to argue that the events in question are now too old to be judged in court, while charges against many of those closest to the affair have been dropped.
”My client is accused of buying shares on the advice of someone who is himself not the object of criminal investigations,” said Traboulsi’s lawyer Olivier Metzner.
The Societe Generale affair was widely cited as evidence of a climate of illicit collusion linking the worlds of politics, business and high finance under Francois Mitterrand, who was France’s socialist president from 1981 to 1995.
The bank had been privatised by the right-wing finance minister Edouard Balladur in 1987, but when a socialist government was re-elected the following year there was a concerted effort to wrest back control and Pebereau agreed to launch a take-over bid.
Pebereau’s consortium acquired 10% of Societe Generale’s capital, but its attempt to take over the bank’s board collapsed in 1989. The operation itself was not illegal and no charges against Pebereau were ever levelled.
The trial is expected to end on November 20, with a verdict at a later date. – Sapa-AFP