The Arco dossier represents one of the biggest deceptions in Belgian history, pleaded lawyer Stijn de Meulenaer on Wednesday on the first day of the hearing of the trial on the former financial arm of the Flemish Christian Workers’ Movement. “Some 800,000 people suffered damage, i.e. around one in 15 Belgians“, added office lawyer Everest, who was pleading for Deminor, the firm representing aggrieved shareholders.
The cooperators lost 100% of their investments, representing a cumulative amount of 1.5 billion euros, because, after the liquidation of the Arco cooperatives, they had nothing left. “While the Belgian State will receive 90 million euros, beweging.net (new name of the Flemish MOC) 45 million and Belfius the rest“(from the liquidation for 200 million euros, editor’s note), according to the lawyer.
Scam on 4 fronts
The latter believes that there has been fraud on four fronts. During his pleadings, he referred to numerous documents from Arco, the Bacob bank and his successor Dexia, to interviews in the press with members of the management and ministers, and to testimonies from cooperative members and bank employees.
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From the subscription of an Arco securities account, there was deception, according to the lawyer. The bank (first BAC / Bacob, then Dexia) had set up a “system“to recruit as many co-operators and money as possible. Bacob evolved in the 1980s and 1990s into a commercial bank, which even took over a bank in Chicago. It therefore needed more and more capital.
It appears repeatedly from documents that the Arco investment was touted as a “safe bet“and”without risk“. It was also described as an attractive savings formula.”for kids“. “Almost a quarter of the 2,172 cooperative members we represent here were minorsThe lawyer added. Bank employees were rewarded if they sold Arco products.
Continuation of fraudulent maneuvers
The bank then continued its fraudulent schemes once someone had become an Arco cooperator. The lawyer here dates back to 2001, whenArco entered Dexia. The risks were then minimized. Even in the midst of the financial crisis, we acted as if everything was fine. But Arco was already in virtual bankruptcy in 2009, explains the lawyer referring to a report from the Analysis group. He also points to the communication given at the time by the manager of Arco, Francine Swiggers. “It was as if the captain of the Titanic was asking to stay on board because a party was in full swing.“
The Belgian State is not exempt from all reproach in this game of dupes, according to Me de Meulenaer. He would have convinced Arco to take part in the rescue plan (capital increase, note) of Dexia, in exchange for a State guarantee. “From the start, there were doubts about the likelihood of this state guarantee to pass the European test.“, said the lawyer, referring among other things to an interview with Minister Didier Reynders in 2018.
Winding up with a plan B
Finally, the cooperative members were further abused after the fall of Dexia and Arco in 2011 when the government tried to bamboozle them with a plan B. Both Minister Koen Geens (in 2014) and Minister Kris Peeters (in 2018) promised a solution which should allow cooperative members to recover 40% of their stake. But this solution was never materialized, for lack of political agreement within the previous executive.