DEXIA announces today a settlement with the shareholders of Lernout & Hauspie Speech Products (LHSP) in the "NASDAQ Class Action" for an amount of USD 60 million (EUR 45.6 million) and a settlement with the private equity fund STONINGTON Partners Inc.
Moreover, on February 12, the District Court of Massachusetts has dismissed the "class action" filed by the shareholders of LHSP who bought their shares on the EASDAQ Stock Exchange.
In 2003, the ¿NASDAQ Class Action¿ was initiated against DEXIA Bank, as successor to Artesia Banking Corporation, which was acquired by DEXIA in 2001. This procedure aimed to obtain a collective compensation for investors who bought shares of Lernout & Hauspie Speech Products on the NASDAQ Stock Exchange in the period between August 19th 1998 and November 8th 2000. This procedure, along with other procedures in the USA, was initiated after it was made public that DEXIA Bank was incriminated in the Belgian criminal investigation of the case.
A ¿class Action¿ is an American legal procedure initiated by lawyers on behalf of an unknown group of allegedly aggrieved persons who find themselves in the same situation. In the United States, the vast majority of such cases are settled.
In the NASDAQ Class Action, a settlement was reached whereby DEXIA Bank pays a lump sum of USD 60 million (EUR 45.6 million) in exchange for Plaintiffs to withdraw their claims and the termination of the procedure. This settlement has yet to be approved by the US Court.
Another class action, initiated on behalf of the shareholders of LHSP who bought their shares on the EASDAQ Stock Exchange, has been dismissed by the District Court of Massachusetts on February 12th 2007.
Besides these two class actions, an individual action initiated by STONINGTON is terminated also following the conclusion of a settlement.
The respective settlements in the NASDAQ and STONINGTON cases as well as the provisions taken by DEXIA do not imply any recognition of liability by DEXIA, who accordingly always has found it was being involved wrongly in this case and who will continue to voice its point of view thereupon.
The adequate provisions will be charged to the 2006 accounts in order to cover the residual risks linked to the American cases for which as yet no settlement has been concluded, as well as for costs and legal fees related to the whole of the American procedures. These provisions shall have no impact on the recurring results of DEXIA and will have only a marginal impact on the annual net results to be published.
"These two actions for which a settlement was concluded and which are the most important amongst the actions initiated against DEXIA Bank in the United States, had us involved in lengthy and highly costly procedures for years" states Axel Miller, Chief Executive Officer of DEXIA.
"We prefer to deploy the important staff resources and considerable means that had to be deployed for these proceedings in a constructive manner for the company, which is the reason why we settled.
Accordingly, these settlements seem to us the best choice we could make in the interest of the stakeholders, customers and shareholders of DEXIA."
For more information
Moniek Delvou : +32 2 222 98 16
+32 2 475 266 495
Brussels : +32 2 213 57 46
Paris : +33 1 43 92 82 54