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Triodos withdraws promised compensation for angry certificate holders

The Dutch sustainable bank Triodos will not launch a buyback program to support duped certificate holders after all. The 45,000 investors who cannot manage their money, including thousands of Belgians, have to make do with an extraordinary dividend of 1 euro.

Triodos is unable to iron out the folds with the thousands of investors who have invested heavily in certificates from the Dutch bank in recent years.

The bank, which prides itself on its sustainable image, announced on Monday that it is going back on an earlier arrangement with which it partly wanted to put thousands of duped investors out of the loop. More than 45,000 people affected, including an estimated 7,500 Belgians, may forget their promised compensation.

7.500

Belgians

An estimated 7,500 Belgians also have Triodos certificates. They haven’t been able to sell it for 2.5 years.

In the past, Triodos raised around 1.2 billion euros to finance its activities by selling depositary receipts. Those securities were entitled to a share of the profits and could only be sold through an internal trading system.
That went smoothly, until the trade in Triodos certificates collapsed when the corona crisis erupted.

As a result, the Dutch bank decided about two and a half years ago to suspend trading in the certificates. In practice, this means that thousands of investors cannot access their money all that time.

Painful stories

Dutch media brought painful stories of people who wanted to sell the certificates after an inheritance, but could not find a buyer. Or how they postpone renovations or other expenses, because the money is tied up in certificates that have fallen sharply in value in the meantime.

At the beginning of this year, Triodos announced a solution: the bank was working on a closed platform where certificate holders could trade their securities. But that platform would not come until 2023 and, moreover, the certificate holders would face an expected loss of 30 to 45 percent.

Triodos, which saw its net profit double last year, announced in February that it would purchase certificates for more than 14.4 million euros as compensation – at a price that is 30 percent below market value. 3 million euros was reserved for the duped investors with the most serious financial problems.

But that arrangement is now completely off the table. Due to ‘unforeseen complications’, both the buy-back program and the ‘solidarity arrangement’ of 3 million can no longer be implemented on time, Triodos says.

This could lead to even more delays in listing the certificates on Triodos’ private trading platform, it says. A risk that the bank considers ‘unacceptable’. The bank does not specify exactly what those unforeseen complications are. The Dutch business newspaper Het Financieele Dagblad talks about ‘interference’ by the Dutch central bank.

To gild the bitter pill a bit, Triodos will pay out the planned 14.4 million euros in the form of an extraordinary dividend. In the course of October, each investor will receive a compensation of EUR 1.01 per certificate.

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