French President Nicolas Sarkozy stepped up pressure on the head of Societe Generale to quit over the bank's recent trading scandal on Tuesday, but France's top business lobby warned him not to interfere.
"I just don't understand the Societe Generale situation. When the chairman of a company experiences a disaster of this magnitude and he does not assume the consequences of this, that is not normal," Sarkozy said in a newspaper interview.
It was his bluntest criticism of SocGen Executive Chairman Daniel Bouton since the bank revealed a record 4.9 billion euros ($7.3 billion) of rogue trading losses on Jan. 24 that has turned the French bank into a possible bid target.
"For someone to make 7 million euros a year does not shock me. But on one condition, that he assumes his responsibilities. That's what the problem is with Daniel Bouton," Sarkozy told Le Parisien newspaper.
"I've got nothing against him. But you can't say 'I'm going to be paid 7 million euros a year' and then, when there's a problem, say 'It's not me'. That, I cannot accept."
A SocGen spokeswoman said the bank had no comment to make on Sarkozy's comments.
Bouton initially offered to resign over the scandal but the board asked him to stay on and the 57 year-old banker told a newspaper this week that his offer to quit was off the table.
Bouton said last week SocGen would not bow to political pressure as the bank posted a record fourth quarter loss of 3.35 billion euros due mainly to the trading losses which it blames on a single trader, 31-year-old Jerome Kerviel.
On Jan. 28, Sarkozy said the bank's management had to face up to their responsibilities over the trading scandal.
His latest criticism drew a rebuff from the head of France's biggest employers' lobby MEDEF, usually considered an ally.
"In an extremely serious crisis like the one at Societe Generale, only board members have all the information needed to judge the situation and take the right decisions," Laurence Parisot told Europe 1 radio station.
"Only the members of the SocGen board are in a position to say if they have the best general or not -- it is certainly not up to politicians to say," she said.
France's biggest listed bank BNP Paribas has said it is looking at SocGen, having failed to buy it in a bitter takeover battle in 1999.
SocGen shares were up 4.4 percent, giving SocGen a market capitalisation of around 31 billion euros. BNP shares flat at 64.22 euros, giving BNP a stock market value of around 58 billion euros.
Lagarde Backs Board
French governments are traditionally considered more interventionist in financial matters, although Britain's reputation for liberal capitalism was dealt a blow by the UK's nationalization of the struggling Northern Rock bank.
Sarkozy led a state rescue of French power group Alstom in 2004 while he was French finance minister, and various members of Sarkozy's government have expressed their desire that SocGen should not fall into foreign ownership.
France has a stake in SocGen through state-owned bank Caisse des Depots (CDC), which owns 2.3 percent of SocGen's share capital.
However, fund managers said it was wrong for the French President to express his disapproval of Bouton.
"It's not his job to say these sorts of things," said Stratege Finance fund manager Jacques Tissier.
Michael Sellam, head of French fund management company Iris Finance, said Sarkozy's attack was ill-timed since SocGen is currently in the process of carrying out a fully underwritten 5.5 billion euro rights issue to repair its finances.
"He has chosen the wrong moment to destabilise the management. On the contrary, one should join ranks around the management while the rights issue is underway," said Sellam.
Sarkozy's own finance minister Christine Lagarde has also appeared at odds with him over his criticism of the bank and reiterated in a separate interview on Tuesday that it was up to SocGen's board to decide the fate of its senior managers.
"It is up to the board to take decisions in terms of management," she told Les Echos newspaper.
Les Echos also reported on Tuesday that fellow French bank Credit Agricole was emerging as a possible ally for SocGen in the face of any attack from BNP Paribas.
Jerome Kerviel has been placed under formal investigation for breach of trust, computer abuse and falsification over the losses. He is in detention pending the investigation.