BELGIUM PLAYS DOWN PING AN’S HOPE FOR COMPENSATION

The Belgian government has said that China’s Ping An should not rely on receiving compensation over the Belgian state’s takeover of the Belgian parts of Fortis business. Belgian prime minister Yves Leterme told local daily De Standaard that he understood Ping An’s disappointment, but that “there are always risks bound to an investment”. It was reported last week that Ping An was seeking help from the Chinese government over the break-up of Fortis, which was backed by the Dutch and Belgian governments and which Ping An considers to have been a form of state confiscation. Ping An booked a Q3 loss of more than $2bn on its 4.99% stake in Fortis after the latter’s share price collapsed to about 3% of their value just over a year ago. Just before the break up the shares were about six times higher than their post-break-up trading level. Ping An is reportedly citing an investment protection treaty under which compensation is payable when either of the governments nationalizes companies in which firms from the other country have invested. Mr Leterme noted that this treaty had not been ratified by the Belgian region of Wallonia. Fortis is meeting in Utrecht today and in Brussels tomorrow, where shareholder approval will be sought for a board restructuring and the continuation of the business as a separate company. Fortis now consists of an international insurance operation and a two-thirds stake in a portfolio of structured credit products.