Case T-257/20: Action brought on 7 May 2020 — González Calvet v SRB
Date: 2020-05-07
Institutions: General Court
Subjects: Spain, audit, bank, company in difficulties, economic value, financial solvency, indemnification, parent company, shareholder, subsidiary








C_2020209EN.01003901.xml










22.6.2020   


EN


Official Journal of the European Union


C 209/39






Action brought on 7 May 2020 — González Calvet v SRB
(Case T-257/20)
(2020/C 209/50)
Language of the case: Spanish

Parties


Applicants: Ramón González Calvet and Joan González Calvet (Barcelona, Spain) (represented by: P. Molina Bosch, lawyer)

Defendant: Single Resolution Board

Form of order sought

The applicants claim that the General Court should:






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annul the decision of the Single Resolution Board SRB/EES/2020/52 of 17 March 2020;










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evaluate all the assets of the entire Banco Popular Group and not just those of the parent company separately from its subsidiaries, as Deloitte has done, given that the entire group has been taken over by Banco Santander and not just the parent company;










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evaluate the performing loans at 100 % of their book value;










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evaluate the non-performing loans at 100 % of their book value, given that, between guarantees and provisions, their cover was close to 100 %;










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evaluate the real estate assets of the Banco Popular Group at EUR 10 896 000 000, given that the corresponding provisions were discounted;










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evaluate the total assets of the Banco Popular Group at EUR 153 785 000 000 in accordance with the arguments set out in the application which provides a realisation value for shareholders in the event of liquidation of EUR 29 365 000 000, after discounting the EUR 124 420 000 000 owed, according to Deloitte, to creditors;










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set compensation of EUR 7.00 per share, being the sum obtained by dividing EUR 29 365 000 000 by 4 196 000 000 shares which were in circulation at the time of the resolution;










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indemnify Mr Ramon González Calvet with EUR 317 072 (three hundred and seventeen thousand and seventy-two euros) for the expropriation of his 45 296 shares and Mr Juan González Calvet with EUR 11 977 (eleven thousand nine hundred and seventy-seven euros) for the expropriation of his 1 711 shares, together with legal costs.





Pleas in law and main arguments

On 6 June 2017, the Single Resolution Board (SRB) resolved Banco Popular and sold it for the sum of one euro to Banco Santander. On 17 March 2020, the SRB, after the bondholders and shareholders in Banco Popular affected by its resolution had exercised their right to be heard, decided in decision SRB/EES/2020/52 that those affected would not be compensated, relying on the Deloitte’s Valuation 3 Report.
In the application, the applicants submit that Deloitte is a discredited auditing company as a result of cases such as Gowex, Bankia, Gescartera and Abengoa, and in fact, it is not currently auditing any major Spanish bank.
In support of the action, the applicant relies on the following pleas in law:






1.


The applicants state that Deloitte’s valuation is biased towards the interests of the SRB and is prejudicial to the shareholders, inter alia because:






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it undervalues the deferred tax assets which were fully covered by Banco Santander;










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it does not take into account the fact that the cover for non-performing loans, between guarantees and provisions, was100 %;










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it undervalues the performing loans portfolio;










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it does not count all the assets of the Banco Popular Group and separates the assets of the legal entity Banco Popular from those of its subsidiaries and investees;










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it does not take into account the fact that the net book value of the real estate assets, after the provisions were discounted, was 10 896 000 000.














2.


On 23 May 2017, the SRB instructed Deloitte to provide a valuation of Banco Popular at a time when its Chair, Elka König, in an interview with Bloomberg TV, acknowledged that Banco Popular was under observation. It follows that the SRB had already decided on 23 May 2017 to resolve Banco Popular, which filtered to the Reuters news agency on 31 May, causing the deposit flight episode which collapsed Banco Popular’s liquidity.










3.


According to the Banco de España (Bank of Spain), the European Central Bank considered Banco Popular to be a solvent bank as at 13 March 2017. Banco Popular was never in liquidation, as Deloitte claims, but it is clear that the SRB set itself the objective of resolving Banco Popular so as to be able to rescue Banco Santander, a European and world systemic bank whose losses (which the applicant’s estimate were EUR 22 573 000 000 in 2017), were hidden from its shareholders through the expropriation of Banco Popular.