EU Court Clears Quick Bank Takeover by Dutch

     (CN) – A speedy emergency takeover of failing bank SNS Reaal by the Dutch government was necessary and did not put shareholders at an unfair disadvantage, the European Court of Human Rights ruled Thursday.
     More than 380 individuals and companies with shares and bonds in SNS sued the Netherlands after Dutch officials – fearing the bank’s imminent collapse – seized the assets and nationalized the bank in 2013.
     The fourth-largest bank in the Netherlands, SNS Reaal’s real estate division ran into trouble after the 2008 global economic crisis and brought the entire conglomerate down.
     Dutch officials moved quickly to protect the bank’s customers and taxpayers and seized shares, capital securities and subordinated bonds issued by the bank. They gave shareholders just 10 days to appeal the expropriation, and a judge issued final approval of the plan less than four weeks after nationalization was announced.
     The Strasbourg-based court dismissed the bulk of the complaint against the Dutch government this past year, finding no violations of the obligation to respect human rights, right to an effective remedy or prohibition of discrimination as laid out in the EU’s human rights constitution.
     However, the court agreed to consider whether the speed of the SNS takeover deprived shareholders of their rights to a fair hearing and access to the courts.
     The shareholders argued that the 10-day window to appeal the expropriation was too short, and complained they didn’t have enough time to study findings of the Dutch finance minister – issued the afternoon before their appeal was heard by the Dutch court.
     Additionally, the shareholders claimed they had been given incomplete versions of the bank’s financial statements that made it impossible to appeal the seizure.
     In a 36-page ruling issued Thursday, a panel of the human rights court acknowledged that the 10-day window to appeal the bank’s takeover was exceedingly short. But the panel also noted that the collapse of SNS would have done serious damage to the Dutch economy.
     “The court takes the view that the applicants, in common with many other appellants, put up a very effective challenge of the legality of the expropriation already in their appeal statements,” the 7-judge panel wrote. “Moreover, they were permitted to submit additional documents until the day before the hearing and could submit further argument orally at the hearing itself. In these circumstances, the court cannot find that the time limit vouchsafed to the applicants for lodging their appeals was so short that the proceedings were for that reason unfair.”
     As for the short time to study the finance minister’s findings, the human rights court noted that the report contained nothing the shareholders didn’t already know. And SNS Reaal’s redacted financial statements would have – if made public – harmed the financial interests of both the bank and the Netherlands as its receiver, the court said.
     Moreover, the takeover was approved in full by the European Commission, the human rights court concluded.
     The court did not address the issue of shareholder compensation, as those proceedings still pending in the Dutch Supreme Court.
     Nationalizing SNS Reaal cost Dutch taxpayers nearly $4 billion. After selling off the conglomerate’s insurance wing to China’s Anbang Insurance Group, the Dutch government plans to dissolve SNS Reaal and sell SNS Bank to private investors.

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