The Mail on Sunday has agreed to pay damages to French bank Société Générale over a report claiming it was in ‘dire financial difficulties”.
In November the bank issued a high court writ over the story, which it claimed led investors to fear it was in danger of imminent collapse.
One investor reportedly threatened to move assets worth €5.45m as a direct result of the 7 August story headlined: ‘France and Italy stand by to bail out biggest banks”.
Two days after the story was first published the MoS carried an apology on its website which Societe Generale complained was hard to find and was not carried in the newspaper.
On Sunday this week the paper issued another apology. It read: ‘On August 7, 2011, we reported Société Générale was in dire financial difficulties because of its exposure to Greek debt, and that the French government was on standby to bail out the bank.
‘We accept that this was untrue; the bank was not in serious financial difficulties, nor was it on the brink of insolvency or in line for a bailout from the French government. We have apologised to the bank and have agreed to pay damages.”
In its original writ the bank claimed its senior management and communications teams in Paris and London had to spend considerable time dealing with the impact of the story.
Both the chief executive and deputy chief executive appeared on television to give interviews allaying fears of its imminent collapse.
Société Générale claimed its share price suffered larger falls on the stock market than other major French banks, its credit default swap level had increased and other articles were published generating negative publicity for the bank.
Investment companies and private banks temporarily stopped trading with Soci̩t̩ G̩n̩rale citing loss of confidence, banking division SG Hambros faced a high volume of withdrawals and transfers, and had to deal with hundreds of calls from clients РSoci̩t̩ G̩n̩ral claimed.
It also alleged that Its French retail banking division had to hold detailed discussions with clients and SG Private Banking faced more withdrawals than expected.
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