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Societe Generale head under pressure to step down

Business Materials 29 January 2008 13:02 (UTC +04:00)

( dpa ) - Pressure grew Tuesday on the head of French bank Societe Generale, Daniel Bouton, to take responsibility for the loss of 4.9 billion euros (7.15 billion dollars), provoked by a single rogue trader, and resign from his post.

Finance Minister Christine Lagarde told LCI television Tuesday that "it is up to the (bank's) directors to take a decision" on whether or not Bouton stays on.

Also on Tuesday, the head of the Senate Finance Committee, Jean Arthuis, told France Inter radio, "I don't think Bouton can do anything but leave (his post)."

The comments followed the declaration made to journalists late Monday by President Nicolas Sarkozy when asked about Bouton: "We are in a system where, when one is very well paid, and probably legitimately, and if there is a big problem, one cannot exempt oneself from responsibility."

Bouton said he had offered to resign when the scale of the loss provoked by the unauthorized trades made by 31-year-old Jerome Kerviel became clear, but that the bank's board of directors had urged him to stay on at his post.

However, statements made by Kerviel to prosecutors during two days of interrogation called into question the version of the affair put forward by the bank.

Paris public prosecutor Jean-Claude Marin told journalists Monday that Kerviel had admitted that his fictitious trading began in 2005, a year earlier than in the bank's version, and that he was not the only Societe Generale employee engaging in unauthorized trades.

Late Monday, Kerviel was placed under investigation by a magistrate for a number of charges, including forgery and breach of trust.

This procedure can lead to his being formally charged with the crimes and ultimately tried. He faces up to seven years in prison and a maximum fine of 750,000 euros.

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