Appeals court hearing
STATEMENT - 18 OCTOBER 2013
The tax treatment of the fraud attributed to Jerome Kerviel was strictly in accordance with the tax regulations applicable to all companies and was fully disclosed, as has been amply described in the 2008, 2009 and 2010 registration documents.
At no point was Societe Generale granted an exemption, nor did the Bank ask to be treated under a different regime than that foreseen by general tax regulations applicable to all companies
All companies deduct costs and losses from income in order to calculate profits and thus taxes owed. In accordance with legal precedent, a loss due to a breach of internal controls by an employee is tax deductible as long as it does not result from «deliberate behaviour or blatant managerial incompetence in terms of the organisation of the department or the implementation of controls ».
The French justice system has twice recognised Jerome Kerviel’s sole criminal responsibility and the damage suffered by the Bank, finding Mr. Kerviel guilty of the charges of fraudulent entry into an automated processing system, forgery, use of forgeries and breach of trust.
It is Mr.Kerviel’s fraudulent activities, carried out without the Bank’s knowledge, which thwarted the Bank’s controls and resulted in the exceptional loss which put the Group’s very survival at risk.
These unequivocal judgments are the result of two lengthy trials, first in the Court of First Instance and then in the Court of Appeal, which were supported by in-depth adversarial debates and by the findings of 18 months of careful investigations.
Societe Generale’s accounts are rigorously audited by statutory auditors and verified by the regulatory authorities. Ample light has already been shed on the unwinding of Mr. Kerviel’s fraudulent positions by the various legal proceedings which have already taken place.