The CJEU concludes that the entity chaired by Ana Botín should not reimburse those who alleged deficiencies in the prospectus for the purchase of shares of Popular in 2016
Banco Popular’s shareholders have no right to demand compensation from Santander for the shares they purchased prior to the entity’s resolution. The Court of Justice of the European Union (CJEU) ruled this Thursday, in a ruling that closes the door to claims from those who acquired titles during the entity’s capital increase in 2016, because the issuance prospectus contained incorrect information.
However, the judges point out that European law provides a guarantee that allows those affected to claim if they have suffered more losses with this operation than they would have suffered in the event of a normal liquidation. In these cases, the shareholders can demand the return of the difference in court.
The decision of the CJEU comes after the Provincial Court of A Coruña requested clarification from the European judiciary to determine whether the resolution rules exclude the right to compensation of shareholders. The question was whether the European banking rules adopted after the 2008 financial crisis, requiring shareholders and creditors to be the first to suffer losses in settlement, prevented shareholders who bought securities before dissolution from claiming and subsequently claiming that they incorrect information.
The High Court also concluded that once the Popular shares lost value – as a result of the resolution and cancellation of the shares – the holders have lost their status as shareholders, so that they cannot exercise the right of liability against the company that succeeds him, in this case Banco Santander, which Popular took over for the symbolic price of one euro.
Likewise, the court understands that there are “public interest purposes” that allow limiting shareholders’ property rights, such as “the importance of ensuring the stability of the financial system”. This was also defended by the General Counsel of the CJEU, Jean Richard de la Tour, in December – whose opinion usually guides the decisions of the CJEU – and from then on, the handling of the shareholders’ appeals became of Popular suspended. The judgment of the European Court establishes case law around this framework for the first time.
The Single Resolution Board intervened in 2017 after a liquidity crisis that made it unfeasible. The acquisition of the entity by Banco Santander could have caused the bank legal costs of up to €3,453 million, an amount that the entity chaired by Ana Botín can now save.
Source: La Verdad
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