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Covéa files complaint against SCOR CEO Kessler, SCOR refutes claims

25th March 2021 - Author: Luke Gallin

Covéa Group has filed on behalf of SCOR a complaint against its Chief Executive Officer (CEO), Denis Kessler, with the Parquet National Financier, which SCOR has refuted and condemned.

scor-and-covea-logosFrench insurer and reinsurer SCOR’s largest shareholder, Covéa, filed the complaint on Wednesday, March 24th, citing market manipulation and misuse of corporate assets.

Covéa says that these actions were taken between September 2018 and January 2019, and includes the large share buyback of roughly 4.6 million SCOR shares for €195 million, which Covéa says was “for the sole purpose of artificially inflating the share price”.

Additionally, French insurance group Covéa highlights €16 million in advisory expenses incurred to allegedly counter an imaginary takeover of SCOR from Covéa, “even though Covéa had withdrawn its otherwise friendly proposition on the 4 September 2018.”

In response, SCOR has condemned what it describes as a groundless move by its largest shareholder, and has also expressed its astonishment that Covéa filed, on behalf of SCOR, a complaint against its CEO.

“SCOR wonders what led Covéa to file this complaint, more than 2 years after it became aware of the facts it pretends to report,” says the firm.

The re/insurer argues that the facts noted by Covéa, being the expenses incurred and extra costs associated with the buyback programme, are perfectly justified and legitimate and, at the same time, are in no way new revelations.

“They were brought forward by SCOR in the proceedings initiated in 2019 against Thierry Derez and Covéa, as elements of the financial prejudice for which SCOR seeks compensation; In this respect, on November 10, 2020, the Paris Commercial Court ordered Thierry Derez and Covéa to pay the sum of EUR 19,603,191, plus interest, corresponding to an indemnification of SCOR for part of this injury,” explains SCOR.

Therefore, continues SCOR, Covéa is “complaining about the consequences of its own misconduct and that of Thierry Derez.”

On the allegations of market manipulation SCOR is just as surprised. The company explains that its share buyback programme was announced the market by SCOR on July 27th, 2017, when Derez was a still a Director of SCOR, more than 12 months prior to the takeover attempt.

“It is therefore absolutely groundless and deceitful to suggest that it was initiated as a result of Covéa’s offer,” says SCOR.

In fact, according to SCOR, it was actually Covéa which caused a strong increase in SCOR’s share price via its press release on Sep 4th, 2018 and its second press release on Sep 27th, 2018 reiterating its interest in the company.

“This complaint clearly seems to have one single goal: to divert attention from the serious misconduct of Thierry Derez and Covéa in connection with the preparation and implementation of Covéa’s unsolicited takeover bid for SCOR in 2018.,” says SCOR.

This is the latest in a protracted dispute between the pair, which started when SCOR rejected an €8.2 billion takeover bid from Covéa in September 2018, which it described as “hostile and unfriendly.”

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