Angry investors face Fortis
AMSTERDAM, Aug 18 (Reuters) – Shareholders grilled the top two executives of Belgian-Dutch financial group Fortis on Monday over the company’s handling of an unexpected solvency plan, but left the three hour-long meeting dissatisfied over the bank’s steps to restore shareholder confidence.
“It was better than expected, but we didn’t get all the answers we need,” said Neil Lemmers of Dutch shareholder group VEB, which along with other shareholder groups had pressed for Fortis to open up a dialogue with shareholders.
The meeting, convened as an “information session” rather than a formal shareholders’ meeting, is one of three that the banking and insurance group has agreed to hold.
Fortis, hit by the credit crisis and the costs of the 24 billion euro takeover of some operations from Dutch rival ABN AMRO last year, stunned investors in June with a 1.5 billion euro share issue and the scrapping of its interim dividend.
The VEB and other shareholder groups were instrumental last month in pushing for the departure of Fortis’ top management.
About 100 shareholders attended the meeting in a cavernous hall in Amsterdam. Two more are planned in Brussels, a Dutch session on Wednesday and a French session on Thursday.
“What is important is transparency and addressing concerns early,” said Fortis Chief Executive Herman Verwilst, who was joined by board chairman Maurice Lippens. Verwilst replaced former CEO Jean-Paul Votron.
Asked whether Fortis would have to raise new capital, Verwilst said: “With the information that we have on the business today and what we see over the next few years, we feel we have done what is necessary.”
Ahead of the meeting, the VEB called on Fortis to adopt new, realistic medium-term targets and drastically change its dual corporate structure of having headquarters and shareholder meetings in Belgium and the Netherlands.
The VEB also demanded that Fortis give monthly updates on the impact of the credit crisis, business developments and integration of ABN AMRO.
The shareholders groups are still pressing Fortis to hold a formal shareholders’ meeting, which could be organized as early as November, to ensure that the board is accountable for its decision before announcing the solvency plan and to discuss the financial group’s future and corporate governance model.