Another Disaster for French Bank: Theft at

Belgian Unit
By Barry James International Herald Tribune

PARIS - The Belgian subsidiary of Credit Lyonnais reported a major theft Friday after a
member of the French Parliament's finance committee said fraud and theft accounted for at
least 5 billion French francs ($874.6 million) of losses at the bank in recent years.

Earlier this week, members of the committee said that the cost to the taxpayer of rescuing the
state-controlled bank was likely to be in the region of 130 billion French francs.

The bank's shares fell 5.5 francs on Friday, to 191 francs. They have fallen 12 percent this
week on the revelations.

The Belgian branch said a female employee had transferred at least 3.5 billion Belgian francs
($100.1 million) to the Swiss account of her husband, who it said was linked with organized
crime.

The news led to a run on the bank's branch at Ghent, but the branch's general manager,
Philippe Cloes, said there were no heavy withdrawals across the network. He said any
unrecovered sums were insured, and that neither the bank nor its customers would be
prejudiced. He said several accounts containing stolen funds had been frozen.

In Paris, Charles Amadee de Courson of the National Assembly's finance committee, said
previous directors of the bank and its subsidiaries, certain executives who had dealings with
the bank and consultants had skimmed off billions.

He said the ''laxness'' with which the bank's directors, including the former president, Jean-
Yves Haberer, was ''incredible.''

Credit Lyonnais, then Europe's largest bank, went on a buying spree at the end of the 1980s,
acquiring real estate just before the bottom dropped out of the market, and making other
dubious investments. These have been hived off into a separate company, Consortium de
Realisation, for resale. Mr. de Courson said the fraud and thefts were discovered when CDR
audited the assets it had acquired.

He said he would press for prosecutions of those who had embezzled at the bank in France,
estimating that there would be 100 cases. The French Ministry of Finance said 45 criminal
investigations and 100 civil cases were under way.

The bank said Daisy Ragolle, an accountant, transferred money to her husband, Laurent
Deney. Both were arrested.

Mr. Cloes said the woman had created a complex mechanism for moving around small sums
of money that had been difficult to track amid the large sums of money the bank moves every
day. He said the bank had placed trust in the employee, who had worked there for 30 years.
The estimate of a 130 billion-franc rescue operation was much higher than the 45 billion-franc
minimum estimate put forward last month by Finance Minister Jean Arthuis. The French
government, which gave the bank 45 billion francs two years ago to straighten out its affairs,
is preparing a fourth rescue plan, but must get the approval of the European Commission.