AGESY Ageas (PK)

A trial against the Dutch state resumed Wednesday as angry former shareholders in the collapsed Dutch-Belgian financial services giant Fortis went to court in search of compensation in a case that could go on for months and drag government officials, regulators, and former company executives to the witness stand.

Former shareholders want to recoup losses they incurred in the wake of the nationalization and break-up of Fortis, which collapsed at the height of the financial crisis. Thousands of private investors lost heavily as Fortis' share price sank to less than EUR1 from EUR29 in four months.

FortisEffect, which says it represents around 1,500 private shareholders, claims investors were misled by the Dutch state in the week Fortis was bailed out and broken up along national lines in early October 2008. It said Fortis shares lost over 80% in value in the week that Fortis received a capital injection and was nationalized five days later when the support turned out to be insufficient.

The Dutch government denies the accusations and claims that the capital injection seemed effective at first but that nationalization became the only option after Fortis' share price continued to slump in the following days.

Still, FortisEffect demands that the key figures--former government officials, regulators, and company executives--appear in the Amsterdam court to testify about what happened. The group reckons that such testimonies would serve as evidence in their battle to be compensated for their losses.

Wednesday's hearing mostly centered on which decision-makers should testify and the court said it will need a couple of weeks to study FortisEffect's request. A final ruling on the case isn't expected before the spring.

The trial follows a string of other lawsuits in the Netherlands and Belgium, in which former shareholders are seeking compensation. An earlier case in the Netherlands was quashed by a court in The Hague last year, on grounds that the Dutch state wasn't thought to have misled Fortis investors deliberately. Also last year, a Brussels court rejected a string of demands from small investors who opposed the break-up.

Benelux financial champion Fortis was split along national lines when the financial crisis hit and the bank collapsed under the weight of buying a large part of ABN Amro Holding NV. It resulted in the Dutch state nationalizing the Dutch assets while Belgium was left to prop up the Belgian parts.

The Belgian government later sold 75% of Fortis Bank Belgium to French bank BNP Paribas (BNP.FR). Fortis Bank Netherlands remains state-owned and is currently being merged with the former parts of ABN Amro. It is scheduled to return to the market in three to five years.

The remnant of Fortis comprises the Belgian insurance arm, which changed its name into Ageas NV (AGS.BT) this year. Ageas has warned that the tumultuous past years could pose a risk. "While some proceedings and investigations do not trigger any immediate risk of material monetary consequences... it cannot be ruled out that they could lead to such negative impact at a later stage," it said earlier this year.

-By Maarten van Tartwijk; Dow Jones Newswires; +31 20 571 5201; maarten.vantartwijk@dowjones.com

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