China's Ping An to Vote Against Fortis Sale

Chinese insurance group Ping An, the largest shareholder in Belgian-Dutch financial group Fortis, said on Sunday it intended to vote against the sale of Fortis assets at a key vote next week.

"Since September 2008, the decisions to sell assets were driven by the Belgian government and have not only destroyed Fortis' value but have also severely impaired Fortis shareholders' interests as a whole," Ping An said in a statement emailed to Brussels.

Since these transactions breached the corporate governance principles of Fortis, Ping An disagreed with the original transactions, it added.

"Furthermore, given the breach of certain governance principles in the organization of the upcoming General Assembly, and the manner in which the revised transaction is being presented to Fortis shareholders, Ping An will vote against the proposed resolutions," the statement said.

"Ping An believes that other options should have been, and still can be, explored in order to sustain the operation of the business and optimize value for shareholders."

The decision by Ping An, Fortis' largest investor, could derail the planned sales of Fortis' Dutch banking and insurance operations to the Dutch state, half of Fortis Bank to the Belgian state and, most  controversially, 10 percent of the Belgian insurance business to BNP Paribas for 550 million euros. 

The French lender agreed in October to buy 100 percent of Fortis Insurance Belgium for 5.5 billion euros, but it revised terms of the deal late last month, trimming the stake to be purchased to 10 percent, amid widespread shareholders' disapproval.

Ping An has already booked a loss of about 15.7 billion yuan ($2.30 billion) to mark down the value of its Fortis holding.

Fortis shares had dropped to below 2 euros from almost 30 euros when it launched its ill-fated joint bid for Dutch rival ABN AMRO and above 5 euros before the company was broken up.

Fortis shareholders are due to meet in Brussels next Wednesday for the crucial vote over the break-up of the stricken group last October.

With a 4.99 percent stake, Ping An is Fortis' largest shareholder. The insurer, of which HSBC Holdings has a 16.8 percent stake, has been largely silent over the carving up of the Belgian-Dutch group, despite the value of its 23.87 billion yuan (US$3.5 billion) investment has shrunk by over 90 percent. 

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