CFI postpones hearing for Nomura's appeal of Czech bank aid decision

13 November 2007

The Court of First Instance in Luxembourg has postponed a hearing for an appeal by Nomura seeking to overturn a European Commission decision that allowed the Czech Republic to provide state aid to CSOB, a bank which took control of rival IBP.

 

Nomura Principal Investment and Nomura International brought the action against the commission in October 2004 following the EU regulator's green light for government monies allocated to Ceskoslovenska obchodni banka.

 

According to court documents, the contested decision determines that pre-accession aid measures that the Czech Republic granted to the bank were not subject to the commission's review for substantive conformity with the EU state aid rules. Nomura submitted that the decision should be annulled on the grounds that the Czech aid measures in question are applicable after the accession of the country to the EU in May 2004.

 

In a separate case, the Japanese bank is also seeking access to a non-confidential version of all documents collected during the proceedings and investigations leading to the adoption of the commission's decision.

 

Nomura bought 46 percent of IPB in 1996 in the first privatization of the Czech banking sector. The Czech National Bank placed the heavily indebted IPB under forced administration in June 2000 and subsequently sold it to CSOB. Nomura maintains it was unfairly pushed out of IPB.

 

The decision to postpone the hearing has been taken after some late questions arose on which neither the commission, Nomura nor the court were willing or able to elaborate. The decision to postpone the hearing is understood not to be related to mere scheduling conflicts, however. No new date has been fixed.

 

By Robert McLeod

© Graham Bishop