Kerviel says his losses cut SocGen’s tax

City A.M. Reporter
SOCIETE Generale omitted to tell the courts it used Jerome Kerviel’s €4.9 bn (£4.3bn) trading loss to reduce the French bank’s tax bill by €1.7bn, Kerviel’s lawyer alleged yesterday.

The French bank rejected the claim, arguing the tax treatment of Kerviel’s loss was made public and met fiscal rules.

The bank’s former trader Jerome Kerviel was sentenced last week to three years in jail and ordered to pay back his €4.9bn trading loss caused in 2008 by risky positions.

Kerviel’s lawyer, Olivier Metzner, appealed the verdict as “senseless” and said it cleared the bank of all blame.

Societe Generale said after the verdict it would not ask Kerviel to pay back the entire sum, which is about 177,000 times his current salary as aninformation technology consultant. “Societe Generale has received a tax credit of €1.690bn, which means that his (Kerviel’s) damage could in no way be €4.9bn,” Metzner said in an interview on France Info radio. “This is scandalous.”

Societe Generale said at the weekend “the fiscal treatment of losses linked to Kerviel’s fraudulent trades was done in a transparent fashion and met all fiscal rules.”

The bank added that any sums paid back by Kerviel would be taxed.

“Everybody knows the bank (Societe Generale) has paid less tax since it made less money,” Societe Generale’s lawyer Jean Veil said yesterday on Europe 1 radio.

“These elements are in the Societe Generale’s public documents which Jerome Kerviel used during his trial.”

Since Kerviel’s record loss, Societe Generale has worked hard to improve its image and tighten risk controls.

French politicans yesterday reacted angrily to the news. Conservative politician Nicolas Dupont-Aignan said the bank should repay €1.7bn as “taxpayers shouldn’t be made to pay for financial speculation”.