Pressure grows for a 'change of captain' at SocGen

The French finance minister, Christine Lagarde, joined politicians calling for the resignation of Société Gé*érale's chairman and chief executive, Daniel Bouton, yesterday as it emerged that one of the bank's directors had sold shares just before news of the rogue trading broke.

M. Bouton was criticised by Mme Lagarde, who said the board should question "whether the person in place is the best to steer his ship when she is pitching, or whether the captain should be changed".

The bank's board is due to meet today.

Mme Lagarde added in a statement to LCI television in France yesterday that Société Gé*érale was in "a crisis situation".

This comes a day after the French President, Nicolas Sarkozy, who was in London yesterday to meet the Prime Minister, Gordon Brown, said: "When there is an event of this nature, it cannot remain without consequences as far as responsibilities are concerned." The statement was widely interpreted in France as a call for M. Bouton's dismissal.

One source close to the French bank said: "It is impossible to deny that the pressure is building on the senior management."

M. Bouton, along with the group's head of investment banking, Jean-Pierce Mustier, offered his resignation to the board after the activities of the alleged rogue trader, Jerome Kerviel, were revealed last week. The board said they should remain in place to resolve the bank's troubles.

Questions have been mounting this week over how SocGen had failed to spot the huge trading positions taken by M. Kerviel last year, as it emerged that the derivatives exchange Eurex had alerted the bank to trading anomalies in November.

M. Bouton said on Monday that his offer to resign remained on the table.

The SocGen board is preparing to meet at its headquarters in La Défense later today. As part of the meeting, the board will review the initial findings of its internal audit launched in the wake of the trading losses.

Meanwhile, the SocGen non-executive director Robert Day and his family's trusts and charitable foundations were revealed to have sold €140.36m (£104.25m) worth of SocGen shares in the two weeks before the losses were announced. SocGen said: "All disclosures were made. No inside information was used in any way with respect to these December and January sales."

A French lawyer, Frederik-Karel Canoy, has launched a suit against the bank, claiming insider dealing, but also against Mr Day, who sold €45m worth of shares on 18 January. The bank said Mr Day had no knowledge of the losses until two days later.

Mr Day has denied any impropriety, and the bank added that he was unaware of the losses sparked by M. Kerviel or the sub-prime write-down worth €2.05bn before completing the trades.

The Financial Services Authority and the French regulator, the Autorité des Marchés Financiers, have been scrutinising whether any trades anticipated SocGen's unwinding of the positions built up by M.Kerviel last week.

M. Kerviel, 31, was released on Monday night after he was formally accused of breach of confidence, forgery and computer hacking. He escaped the more serious accusations of fraud and aggravated breach of confidence.

He had built up trading positions worth €50bn in futures positions across Europe. When the bank unwound the positions at the start of last week, the losses amounted to €4.9bn.

SocGen was reported to be surprised by claims that M.Kerviel had been engaging in trading activities without the bank's knowledge since 2005.

A source said: "The bank could find no record of it before 2007. If he was breaching his limits before then it didn't cause heavy losses and wasn't significantly big enough to catch the bank's attention."

The source poured cold water on the chance of a takeover, despite the bank's shares leaping around 10 per cent on speculation that it was a target. He said: "There is no way the politicians would allow a cross-border deal, and a domestic merger would create such a huge headache with various bits having to be sold off that it just isn't likely."

François Fillon, the French Prime Minister, said: "The government is determined that Société Générale remains a great French bank."

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Financial Adviser

£20000 - £60000 per annum: Recruitment Genius: Are you recently QCA Level 4 qu...

SThree: Graduate Recruitment Resourcer

£20000 - £22500 per annum + OTE £30K: SThree: SThree Group have been well esta...

Guru Careers: Application Support Analyst / 1st Line Support

£25 - 30k: Guru Careers: We are seeking an Application Support Analyst / 1st L...

Guru Careers: .NET Developer / Web Developer

£45K - £55K (DOE) + Benefits: Guru Careers: We are seeking a full stack .NET D...

Day In a Page

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

How a costume drama became a Sunday night staple
Miliband promises no stamp duty for first-time buyers as he pushes Tories on housing

Miliband promises no stamp duty for first-time buyers

Labour leader pushes Tories on housing
Aviation history is littered with grand failures - from the the Bristol Brabazon to Concorde - but what went wrong with the SuperJumbo?

Aviation history is littered with grand failures

But what went wrong with the SuperJumbo?
Fear of Putin, Islamists and immigration is giving rise to a new generation of Soviet-style 'iron curtains' right across Europe

Fortress Europe?

Fear of Putin, Islamists and immigration is giving rise to a new generation of 'iron curtains'
Never mind what you're wearing, it's what you're reclining on

Never mind what you're wearing

It's what you're reclining on that matters
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence