{"id":2171,"date":"2008-01-16T19:48:55","date_gmt":"2008-01-16T15:48:55","guid":{"rendered":"http:\/\/geoeconomics.ge\/en\/?p=2171"},"modified":"2013-03-16T19:49:35","modified_gmt":"2013-03-16T15:49:35","slug":"societe-generales-corruption-and-pilfering-record","status":"publish","type":"post","link":"http:\/\/geoeconomics.ge\/en\/?p=2171","title":{"rendered":"Societe Generale\u2019s corruption and pilfering record"},"content":{"rendered":"

FROM THE REDACTION <\/strong><\/p>\n

Recent years a wave of sensation (boom) flooded Georgia\u2019s Bank sector and the introduction of French Giant Societe Generale was followed. <\/p>\n

Taking the controlling pack in the Bank Republic the first thing it did was the appointment of a foreign manager Gilbert and fixing enormous salary for him. Of course, for mortgage credits it opened a new $8 million line, but neither was distinguished with extreme aggressiveness on Georgia\u2019s Bank market, nor with introduction of know-hows. Mr Gilbert in 2007 announced to us that the top priority for them was to preserve stable, solid rate of development.
\n Herewith the advertisement was changed and slightly the image too – \u201cWe are the members of the World Group Societe Generale The scandal about robbing 5 billion was spread all over the world and surprised not only the financial world, but also an ordinary shareholder. \u201cBank Republic\u201d declared that they did not hold any kind of business and had nothing common with them. But how?! <\/p>\n

On International scale the facts about money grabbing by Bank workers are kept in secret. Here works the formula, it is not in the sphere of the effected bank\u2019s interest to trumpet (divulge) this information. First of all, such kind of information will diminish its reputation among clients. The primary capital of the bank is a prestige (authority) and an image, after loosing these it may become bankrupt in several days.
\n Second, the bank does not want excessive control not only from the police side but also from regulators. So, in most cases banks, even large banks hide the facts of money grabbing.
\n World is a ware of a famous fact that happened in the World Banking system, when England\u2019s oldest Bank with the history of 233 years collapsed a man called Nick Leeson, who was a bank\u2019s broker and operated on Singapore International Monetary Exchange. This was announced in 1995 and the bank collapsed. The official version was misleading. Without bank\u2019s full top management, Nick Leeson could not have managed to operate so freely on long and short, open or closed positions, also operating on huge, and million lots. Bank management uses this dealing- exchanging and selling bonds, for receiving additional income and in case of loosing the whole responsibility is taken by an ordinal broker. Who is aware of dealing-room and back-office scheme knows that it is impossible for one man to spoil so many things in a bank. The scheme is as follows: – on the bank\u2019s co-accounts with clients\u2019 money, bank makes speculative trades, sells and buys currencies and bonds, takes part in the operation of hedge funds. When the operation is over and broker\u2019s office gets (receives) the commission it is transferred in offshore, on a separate account and the basic money is returned to the bank. From offshore the bank management shares the profit.
\n For example in September, 2007 you bought \u02c6100 million with $125 million and in the end of November you sold this \u02c6100 million, closed the position and received $147 million, so your profit in two months composed $22 million, with the exception of little commission (which conscientious management leaves to a bank for using its money). The rest is transferred in offshore from this broker office and is shared among the banks employed, I underline \u2013 employed management. In certain cases influential founders (constituents) take part is such kind of actions and fleece the shareholders. With such kind of success (progress) you can buy (gain) the futures of gold, oil and etc. The world is sick with speculation and exactly speculators \u201cbears\u201d and \u201cbulls\u201d are the price controllers on the world market. Let\u2019s say that they failed and everything happened vice versa, you with $147 million bought \u02c6100 million, after this the price rate reduced and dollar became strong, what about your \u02c6100 million? In this case we dedicate the loss to a bank, because a bank can bear it and this is registered as a course loss and is covered with banks\u2019 income. From the bank\u2019s duty free incomes the sum of money is lessened in budget and state finances the bank\u2019s top management risky operations. But when this loss is $25 million it is easy to cover it, but when it is \u02c64.9 billion or $7.2 billion, or in short it equals Georgia\u2019s GDP covering of it becomes unimaginable. The scandal breaks, but instead of everything thousands of scandals remains hidden, because banks keep them in secrecy.
\n The secret is kept- the bank critically lacks liquidation and money. It has to attract money at any price, this is not excluded in case of People\u2019s Bank, or it has to attract money for the dealing. The second typical symptom of several banks is that they do not care for clients or financial projects. Why? why does a bank exist if it shows no interest for clients? It either operates for dealing, this is not considered to be a crime, or for insiders. If we observe them separately neither of it will appear to be a crime. But here we speak how transparent and transferable the bank\u2019s management and account operation are? And how much adequate is the auditing conclusion on bank\u2019s financial activities?
\n The member of Poland\u2019s National Bank Board Pavel Sametski declares that it is necessary for every bank to have more capacious audit and cover broadly each part of its activity. After forming the common united regulation in Poland this issue became very strict and the operation of financial institutions on exchanges is dealt with a special interest.
\n First British Bank\u2019s head of supervisory board Nugzar Pipia announces that in the legislation of Georgia special article is put which will control the whole staff of top management. It will be presented to the National Bank and detailed study of these staff will follow. Moreover every sphere of bank\u2019s activity is controlled by audit and the final resolution that often exceeds 80-100 pages appears to be comprehensive. But in our opinion the main problem is that in Georgia and in all over the world such kind of resolutions are confidential and never published. World Banking System shares this problem. The professor of Warsaw\u2019s Economic School Martin Novakovski announces that this is the problem of World Banking System. We face a dilemma\u2014he says, on one hand keeping confidentiality in a bank activity is of vital importance, on the other hand this confidentiality may create huge problems.
\n French Bank hadthe same problems. The Bank Credit Agricole SA was forced to recognize that the machination of New York Office staff cost the bank \u02c6250 million. This amount of money is a bit ridiculous in comparison with \u02c64.9 billion that was grabbed by the staff of \u201cSociete General\u201d, but still signals the tendency. Moreover, such amount of money in spite of the complexity of dealing operation could not be made by one or two workers. To my mind the case is about a seriously organized group and it is a worldwide tendency happening in many banks. But the loss is not extremely catastrophic and so it does not become a case of worldwide discussion.
\n The second tendency in Georgia and in all over the world lies in management keeping that grows with a lightening speed. In Georgia\u2019s banks income grows but profit and extra charged dividends remain unchanged. We can say that bank\u2019s management does not care for the level of dividends. Naturally the question arises: why is not this important problem, a case of special and careful discussion? Because if we examine the example of \u201cSociete Generale\u201d, we have to say that in 2006 this bank received the net profit of \u02c65.22 billion. This year the loss is of the same amount and management announces that this problem will be solved by the increase of capital, in other words the loss will be covered from the net profit and mend the balance in such kind of way. But on whose expense it comes out? The income of shareholders is grabbed by the bank officials. Is it fair? We consider this fact to become a case of a broad analysis in every country of the world and even in Georgia. <\/p>\n","protected":false},"excerpt":{"rendered":"

FROM THE REDACTION Recent years a wave of sensation (boom) flooded Georgia\u2019s Bank sector and the introduction of French Giant<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[28],"tags":[],"yoast_head":"\nSociete Generale\u2019s corruption and pilfering record - Geoeconomics<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"http:\/\/geoeconomics.ge\/en\/?p=2171\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Societe Generale\u2019s corruption and pilfering record - Geoeconomics\" \/>\n<meta name=\"twitter:description\" content=\"FROM THE REDACTION Recent years a wave of sensation (boom) flooded Georgia\u2019s Bank sector and the introduction of French Giant\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\">\n\t<meta name=\"twitter:data1\" content=\"5 minutes\">\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebSite\",\"@id\":\"https:\/\/geoeconomics.ge\/en\/#website\",\"url\":\"https:\/\/geoeconomics.ge\/en\/\",\"name\":\"Geoeconomics\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":\"https:\/\/geoeconomics.ge\/en\/?s={search_term_string}\",\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"http:\/\/geoeconomics.ge\/en\/?p=2171#webpage\",\"url\":\"http:\/\/geoeconomics.ge\/en\/?p=2171\",\"name\":\"Societe Generale\\u2019s corruption and pilfering record - Geoeconomics\",\"isPartOf\":{\"@id\":\"https:\/\/geoeconomics.ge\/en\/#website\"},\"datePublished\":\"2008-01-16T15:48:55+00:00\",\"dateModified\":\"2013-03-16T15:49:35+00:00\",\"author\":{\"@id\":\"https:\/\/geoeconomics.ge\/en\/#\/schema\/person\/c8498c0ae03a66c87b59761fbd19b04c\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"http:\/\/geoeconomics.ge\/en\/?p=2171\"]}]},{\"@type\":\"Person\",\"@id\":\"https:\/\/geoeconomics.ge\/en\/#\/schema\/person\/c8498c0ae03a66c87b59761fbd19b04c\",\"name\":\"Admin\",\"image\":{\"@type\":\"ImageObject\",\"@id\":\"https:\/\/geoeconomics.ge\/en\/#personlogo\",\"inLanguage\":\"en-US\",\"url\":\"http:\/\/2.gravatar.com\/avatar\/bf2d8703d729f003d8905b57fcab5078?s=96&d=mm&r=g\",\"caption\":\"Admin\"}}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","_links":{"self":[{"href":"http:\/\/geoeconomics.ge\/en\/index.php?rest_route=\/wp\/v2\/posts\/2171"}],"collection":[{"href":"http:\/\/geoeconomics.ge\/en\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/geoeconomics.ge\/en\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/geoeconomics.ge\/en\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"http:\/\/geoeconomics.ge\/en\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2171"}],"version-history":[{"count":1,"href":"http:\/\/geoeconomics.ge\/en\/index.php?rest_route=\/wp\/v2\/posts\/2171\/revisions"}],"predecessor-version":[{"id":2172,"href":"http:\/\/geoeconomics.ge\/en\/index.php?rest_route=\/wp\/v2\/posts\/2171\/revisions\/2172"}],"wp:attachment":[{"href":"http:\/\/geoeconomics.ge\/en\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2171"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/geoeconomics.ge\/en\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2171"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/geoeconomics.ge\/en\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2171"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}