Wednesday, September 14, 2011

SocGen plans action against Mail on Sunday

Société Générale, France’s second largest bank and one of the largest in Europe, is reportedly planning to take legal action against the Mail on Sunday for defamation, according to an internal memo seen by Reuters. Following a story published by the Mail on Sunday on the 7th August, in which the bank was described as being in a “perilous” state and on the “brink of disaster”, shares in the French bank fell by almost 20% in a single day. The Sunday newspaper quickly retracted its August 7 story, acknowledging that they now accept that the story was “not true”. The paper was not alone in questioning the bank’s stability; the story was part of a storm of rumors in early August that speculated about the bank’s financial solidity and exposure to Greek debt. The leaked memo reportedly said that Société Générale was preparing to sue Associated Newspapers, the publisher of Mail on Sunday, for undisclosed damages as well as promising to take legal action against any others who “spread unfounded rumors about our company”. A separate report by the French newspaper Le Figaro asserts that the French bank has agreed to settle its claim if Associated Newspapers donated £1million to charity; it is not yet clear if the publisher has accepted this offer, after its previous offer of donating £1,000 to charity was rejected by the bank.

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