13 February 2008

MLex: Nomura drops CFI appeals over EC clearance of state aid to Czech bank

Nomura, the Japanese financial services conglomerate, has dropped two appeals it had pending with the Court of First Instance against a European Commission decision approving Czech governmental aid to the bank CSOB, which subsequently took control of IBP.

Two entities Nomura Principal Investment and Nomura International brought the main action against the commission in October 2004 following the EU regulator's approval of financing granted by the state to CSOB (Ceskoslovenska obchodni banka). 

Nomura took a 46 percent stake in IPB (Investicni a Postovni Banka) during 1996 when the Czech Republic was conducting the first wave of privatization. Four years later, the Czech National Bank put IPB - once the country's third largest bank - under forced administration and subsequently sold it off to CSOB. Nomura believed it was unfairly squeezed out of IPB and started legal proceedings in 2004.

In November last year, the CFI postponed a hearing on the case, and now the appeals have been dropped following a settlement reached between Nomura and the Czech government. One of the provisions of that agreement – reached in November 2006 – was an abandonment of legal proceedings in the European courts. 

The Japanese bank was seeking to annul the commission decision, whereby the aid measures were not subject to the commission's review for substantive conformity with the EU state aid rules since they took place before the country's accession to the EU in May 2004. 

Nomura claimed that the decision should be overturned on the grounds that the aid measures in question were applicable after accession as well. 

The financial institution had also lodged a second appeal in 2005, seeking access to a non-confidential version of all documents collected during the proceedings and investigations leading up to the commission's decision. 

Following a request in early December last year from Nomura to withdraw the cases, the court has now published two orders, adopted on 1 February but only now made public, announcing that both appeals have been dropped. Nomura will pay its own costs and those of the commission.

By Lewis Crofts

© MLex