French police raid three banks in Natixis probe

By AFP

July 15, 2010 Updated May 19, 2009 at 2:02 PM CDT

French police raided the headquarters of French investment bank Natixis and its two parent banks Tuesday as part of a probe into allegations it misled shareholders, a judicial official said.

Police searched the offices of Caisse d'Epargne and Banque Populaire, which jointly own Natixis, following a complaint lodged in February accusing Natixis of releasing false information.

A group representing 90 minority shareholders accuse the bank of "spreading misleading information, presenting inaccurate accounts and paying out false dividends" in its 2006 stock market listing.

A spokesman for the group representing the minority shareholders, Colette Neuville, told AFP in March that "most of the shareholders complain about the conditions under which they were approached" to buy the shares.

"They judge themselves to have been badly informed or even misinformed."

Natixis shares sold for 19.55 euros when it was first listed in 2006, but were trading at 1.42 euros at the close of trading on Monday.

Natixis said in a statement that the police search "was nothing out of the ordinary" and part of a routine police investigation.

France's AMF financial market regulator is also carried out a separate investigation into the Natixis share price.

The bank, which has been badly hit by the financial crisis, is a jointly owned subsidiary of Caisse d'Epargne and Banque Populaire, which are negotiating a merger.

Natixis last week reported a massive first quarter loss of 1.8 billion euros (2.5 billion dollars) on top of 2.8 billion euros lost in 2008.

It is seeking a capital injection of 3.5 billion euros from its two main shareholders that would be the third rescue package in less than a year, with the total coming to nine billion euros.

On another front, police are investigating complaints of conflict of interest after President Nicolas Sarkozy appointed a former top economic advisor to head the new merged Caisse d'Epargne-Banque Populaire bank.

Francois Perol, who was appointed in February, is due to take the reins this summer of the new group, which will be France's second biggest bank.

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