Following a landmark court case last December, Fortis shareholders will meet on 11 February to vote on the proposed sale. Ping An, the Chinese insurance group, holds 5% of Fortis, making it the biggest single shareholder. Last week, it made clear it would vote against the sale. “Since September 2008, decisions on the sale of parts of Fortis have been directed by the Belgian government, and these have not only wrecked the value of Fortis but have also in general caused great harm for shareholders,” the company said in a statement.

The decision to oppose the sale puts Ping An on the side of a host of small shareholders and could be enough to swing the vote and block the sale. This outcome would be the latest upheaval in a saga that has already seen the bank decimated and led to the resignations of Belgian prime minister Yves Leterme and justice minister Jo Vandeurzen.

At the root of the problem lies Fortis’ hostile acquisition in 2007 of the Dutch bank ABN Amro. Fortis joined a consortium with Banco Santander and Royal Bank of Scotland, with its share of the sale being €24 billion.

The board of Fortis was caught by surprise by the global crisis in the banking sector, and when it instituted a capital increase of €1.5 billion and the suspension of the dividend, its shareholders revolted. CEO Jean-Paul Votron had to step down, followed quickly by CFO Gilbert Mittler. There followed a run on both savings accounts and the share price.

Last September, the governments of the Netherlands, Luxembourg and Belgium stepped in to bail Fortis out, taking a 49% stake in return for a cash injection of €11.2 billion. Only days later, Dutch finance minister Wouter Bos announced that he was nationalising all Dutch holdings of Fortis, for a price of €16.8 billion. The Belgian government followed suit, but then sold 75% of the bank and 100% of the insurance business to BNP Paribas, in return for an 11.2% equity stake in the French bank. All that was left of Fortis in Belgium was a portfolio of dubious credit investment paper.
Small shareholders, for whom Fortis (formerly Société Générale de Banque) had long been a favourite blue-chip share, reacted violently. Not only had their investment been virtually stripped of any value, but the government had now sold off any chance of their holdings recovering in value.

Two groups representing thousands of small shareholders began a series of legal actions. In the first case in November, a Brussels court said the fact that shareholders had not been consulted about the sale was not grounds to suspend the deal. Then in December, shortly after shareholders had rejected the candidacy of Etienne Davignon to take over as chairman, the appeal court put a block on the sale to BNP Paribas and ordered that shareholders must be consulted and their approval sought.

Shareholders claim the government sold off Fortis at a knockdown price, especially since the bank had just had €17.5 billion in cash (from the Belgian government in September and from the Dutch in the nationalisation of ABN) pumped into it. Yet BNP Paribas values the bank at only €11 billion. What is more, the shares in which it intends to pay for Fortis have lost €4 billion in value since the deal was initialled in October.

Ping An on Monday told De Standaard it was ready to negotiate with the government to find a way to avoid a “no” vote this week. Asked if the desire was mutual, a government spokesman told the paper: “Nothing is planned, but a lot can happen in 24 hours.”