Europe News

Societe Generale Sues Over ‘Disaster’ Claims

By Salamander Davoudi, Financial Times

Société Générale has initiated legal proceedings against Associated Newspapers following a Mail on Sunday article which incorrectly claimed that the bank was on the “brink of disaster” and in “a perilous state”.


The French bank has lodged papers with the High Court in which it claims it has suffered “substantial damage to its reputation and prejudice to its trade” following publication of the article, which appeared in the Mail on Sunday and on the Mail Online website on 7 August.

SocGen issued a statement a day after publication stating that the article was “false and irresponsible”. Two days later the Mail Online removed the story from its website and published an apology.

The Mail Online website on August 9 said: “We now accept that this was not true and we unreservedly apologize to Société Générale for any embarrassment caused,”.

But Société Générale shares fell 33 percent in Auguston the back of investor concern over the sovereign debt held by the bank. The bank said it was not satisfied with the apology from Associated as it was not easy to find on the website and had not appeared in the newspaper.

The bank is claiming for damages to compensate for the business it said it had lost resulting from the article and for the “cost of mitigating the damage” caused.

The Mail on Sunday has said that it has already apologized for publishing the articleand that any claim for damages would be resisted. Associated was not available for comment. SocGen declined to comment.

The legal action is a further blow to Associated which was in the spotlight this week after actor Hugh Grant accused the Mail on Sunday of phone hacking in his testimony to the UK government inquiry into press standards.

His accusation against the Sunday paper followed a February 2007 article about problems in the relationship he then had with Jemima Khan. It said that she had a rival in the form of a “plum-voiced executive of Warner Bros”.

The only explanation he could think of was the assistant of a friend who worked in Hollywood who had a refined English accent and who had left voices on his mobile phone voicemail.

The allegation marks the first time that an Associated Newspapers title has been accused of illegal phone interception. The business is the national newspaper arm of Daily Mail and General Trust.

Rejecting the allegations made on Monday, Associated Newspapers issued a statement describing his evidence as “mendacious smears”.