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08 februari 2013

The VEB appeals against the exproperation of SNS Reaal shares

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The Dutch investors association VEB today launched an appeal on behalf of over 1,000 investors against the Dutch government’s decision to take over their securities in SNS Reaal NV without compensation.

The VEB believes such a significant infringement of the property rights of private individuals requires judicial evaluation. This afternoon, therefore, the VEB submitted an appeal document to the Council of State, the country’s highest administrative court.

On February 1, the Dutch finance minister decided to expropriate all shares and subordinated bonds in SNS Reaal NV and SNS Bank NV. 

This was done on the basis of the new Intervention Act, which allows the minister to intervene if a bank is getting into difficulty. The minister has stated that neither category of investor will receive any compensation.

The VEB’s article of association make clear its role is to represent all investors; that is to say, the interests of both groups who have lost their property.

The VEB’s starting position is that the management board and the supervisory board of SNS Reaal NV are primarily responsible for the current situation.

In addition, the role of company accountant KPMG and the Dutch Central Bank as regulator need to be examined.

The VEB also considers it right to test the Intervention Act in court, given this is the first time it has been applied.

Expropriating property from private citizens is such a far-reaching infringement of citizens’ rights that its legitimacy should be subjected to an independent, legal assessment.

There are also serious questions with the minister’s decision to expropriate the securities, a decision which rests almost solely on a new valuation of the property portfolio of SNS Property Finance. This calls for a second opinion.

In addition, the expropriation has implications for any claim rights which former shareholders and subordinated bondholders may have towards the company and its executives, such as for mismanagement or misinformation.

It is very much the question whether this move can be reconciled with the Intervention Act’s stated aim of ‘ensuring the stability of the financial system’.  

Dutch investors association VEB

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