KBC: ordered to pay penalties in Czech Republic

(CercleFinance.com) - KBC announced on Friday evening that it had received an arbitration award of CZK 3.
7 billion (156 million euros) in a dispute in the Czech Republic.

The arbitration proceedings concerned CSOB, the Czech subsidiary of the Belgian financial group, which was sued as the buyer of Investicni a postovni banka (IPB), an institution it acquired in 2000.

It had been suing ICEC-Holding since 2007, claiming that IPB had breached its contractual obligations in 1999, entitling it to damages and a contractual penalty.

The payment of damages and contractual penalties will have a negative financial impact on the accounts of CSOB and the KBC group, amounting to 149 million euros before tax, or 121 million euros after tax.

KBC states in a release that its subsidiary CSOB will examine possible legal steps to have the award reviewed.


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