On 6 November 1997, PAEF, ECC and Générale de Banque signed a shareholders agree- ment whereby the Belgians committed to subscribe to a PPAB capital increase. The Belgian bank s stake was limited to 9.7%, firstly to avoid having to ask the Polish Central Bank for authorisation, and secondly because PAEF wanted to retain a majority share in PPAB for another two to three years. Générale de Banque was also granted pre-emption rights on shares held by US investors.

In November 1997 Luc Delvaux, the Managing Director of the International Department of Générale de Banque, was appointed to represent the bank on PPAB s Board of Direc- tors, while Jean-Luc Deguel was appointed to the Executive Board. Monika Banczyk was given responsibility for the Eurodesk that had been set up to help Belgian and Dutch companies enter the Polish market. Poland had become the number one export-import country in Central Europe and over 1,000 Belgian companies were now exporting there. Belgium was also the seventh largest foreign investor in Poland. As far as the bank was concerned, Poland was the largest market in Eastern Europe, a promising market that is growing quite slowly, but in a more organised and sound manner than other countries in the region 99.

Générale de Banque becomes PPAB s majority shareholder

PPAB s business grew fast. In July 1998, the Eurodesk set up at the bank had relations with a hundred or so Belgian and Dutch companies, many of whom owned subsidiaries in Poland. In view of the many loan requests from PPAB clients, in November 1998 Générale de Banque raised its advances for the purpose of guaranteeing these loans from 15 to 40 million Deutschmarks.

By July 1998, Générale de Banque was planning to increase its stake in PPAB by pur- chasing 6.5% of the shares held by the Japanese group Nomura International. However, under the agreement signed in November 1997, the US shareholders vetoed this transac- tion. Générale de Banque then began working towards an early purchase of the 48% total stake held by those US shareholders.

Luc Delvaux was given the job of negotiating the purchase with the PAEF Chairman, Robert G. Faris. He soon realised that the US fund had no long-term plans for growing PPAB. Faris was in fact intending to get out of the Polish bank, either because he wanted to pay back to the US Senate the funds it had provided ( ) in the context of the US polit- ical debate that we are aware of , or because he feared that Polish banks profit margins would soon shrink100.

99. Executive Board minutes of 22 July 1998.

100. Note from Luc Delvaux to the joint Managing Directors, J. Verdickt and J. Tack, in the Annex to the Minutes of the Executive Board meeting of 22 July 1998.





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