Annual report 2006 - Dexia.com

GENERAL INFORMATION
In accordance with the procedure set out by the Company,
the Extraordinary Shareholders’ Meeting of Dexia SA held on
May 10, 2006 decided to cancel 22,096,720 treasury shares
held by the Company. The cancellation of these shares takes
place without any reduction of the Company’s share capital,
which involves an increase in the accounting par of the
remaining shares. After this cancellation, the Company made
no more repurchases of treasury shares in 2006. The balance
of the portfolio of treasury shares indicated in the table on
the previous page corresponds to the number of Dexia shares
still held by Dexia Crédit Local (direct subsidiary of Dexia SA
within the meaning of Article 627 § 1 of the Company Code)
as of December 31, 2006, within the context of a stock option
plan put in place by that subsidiary. The movements indicated
under the heading “Transfers over the period” in the table on
the previous page result from the exercise of those options.
3. OVERVIEW OF THE DIRECT
HOLDINGS OF DEXIA SA
AS OF DECEMBER 31, 2006
The 13 direct holdings of Dexia SA as of December 31, 2006
are as follows:
• 100% in Dexia Bank SA (Belgium);
• 100% in Dexia Crédit Local SA (France);
• 57.66% in Dexia Banque Internationale à Luxembourg SA
(Luxembourg);
• 100% in Dexia Management Services Ltd (United Kingdom);
• 99.99% in Dexia Employee Benefits SA (Belgium);
• 99.99% in Dexia Participations Luxembourg SA (Luxembourg),
which holds 42.26 % of Dexia Banque Internationale
à Luxembourg SA;
• 100% in Dexia Habitat SA (France);
• 10% in Dexia Holding Inc., a parent company of Financial
Security Assurance Holdings Ltd (United States);
• 8.42% in Dexia Financière SA (Belgium);
• 100% in Dexia Nederland Holding NV (Pays-Bas);
• 100% in Dexia Funding Luxembourg SA (Luxembourg);
• 95% in Dexia Participation Belgique SA;
• 99.5% in Associated Dexia Technology Services SA
(Luxembourg).
Dexia SA has two permanent offices, one in France and one
in Luxembourg.
4. LITIGATIONS
4.1. DEXIA BANK NEDERLAND
Background
The difficulties linked to the share-leasing activities of the
former Bank Labouchere (now Dexia Bank Nederland NV;
herein-after to be referred to as “DBnl”) appeared at the time
of the fast and severe fall of the Amsterdam stock market in
late 2001. The value of the securities used as collateral against
the loans granted by DBnl proved insufficient in a large
number of contracts, thus potentially ending with a residual
debt instead of the gain initially hoped for.
Reference is made to the detailed disclosures, as contained
in the Dexia Accounts and Reports 2005 (especially pages 86
to 88) and in the Activity Reports published during the year
2006.
“Binding force” to the Duisenberg Arrangement
On April 29, 2005, the announcement was made that the
mediation undertaken by Mr Wim Duisenberg had been
successful. DBnl entered into a general settlement with the
Foundations Leaseverlies and Eegalease, the Consumentenbond
(Dutch Consumer’s Association) and the Vereniging
van Effectenbezitters (Dutch association of security holders),
herein after to be referred to as “the Interest Groups”.
After a positive response by an overwhelming majority of the
share-leasing contract holders who joined the foundations
Leaseverlies (82% of those replying) and Eegalease (78% of
those replying), the settlement agreement between DBnl and
the Interest Groups was signed on June 23, 2005. As a result
of this Duisenberg Arrangement, the collective proceedings
that had been filed by the Interest Groups against DBnl have
been set aside.
DBnl has made it clear to all parties concerned that its willingness
to enter into the Duisenberg Arrangement entails no
admission of responsibility.
DBnl’s costs and provisions arising from the Duisenberg
Arrangement have been recalculated each quarter on the
basis of prevailing market data and client conduct.
The Duisenberg Arrangement has been effective since October
2005. Its conditions as well as other information regarding
this Arrangement may be found at www.dexialease.nl.
On December 31, 2006, more than 62,000 clients holding
more than 105,000 contracts have accepted settlements
based on the Duisenberg Arrangement. This figure does not
include the approximately 200,000 contracts of clients which
had already ended in another settlement, including a waiver,
and of which some also potentially benefit from the Duisenberg
Arrangement.
On November 18, 2005, DBnl and the Interest Groups have
filed their joint petition to the Amsterdam Court of Appeal to
grant binding force to the Duisenberg Arrangement, based
on the newly introduced “Law on Collective Settlement of
Mass-Damage”.
In May 2006, the Amsterdam Court of Appeal held four days
of public hearing in respect of this joint petition of DBnl and
the Interest Groups to grant binding force to the Duisenberg
Arrangement. Over 60 other interest groups and individual
clients had put up a defence. On June 20, 2006 this court has
rendered an intermediate decision, including an assignment
to the Autoriteit Financiële Markten (AFM) – the Dutch regulator
of the financial markets – to report on the issue whether
DBnl has actually bought and held the shares necessary in
respect of the share-leasing contracts. On November 9, 2006,
AFM has issued the final report that was favorable for the
position of DBnl. The Amsterdam Court of Appeal has rendered
the definitive decision on January 25, 2007, granting
binding force to the Duisenberg Arrangement, which means
MANAGEMENT REPORT
COMPTES CONSOLIDÉS
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