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Greenspan: Shareholder foe?

He's never been a fan of irrational exuberance, anyway. Now U.S. Federal Reserve chief Alan Greenspan has found himself the focus of shareholder anger stemming from his role on the board of the Bank for International Settlements.

He's never been a fan of irrational exuberance, anyway. Now U.S. Federal Reserve chief Alan Greenspan has found himself the focus of shareholder anger stemming from his role on the board of the Bank for International Settlements.

On January 8, to avoid any conflict of interest between its public mission and the demands of nearly 1,000 institutional investors, the bank's board (which includes French central banker Jean-Claude Trichet and Bank of England governor Eddie George) voted unanimously to buy out the 13.7 percent stake of BIS that still is in private hands. The board would pay shareholders Sf1.16 billion ($688.4 million), although the net asset value, by the bank's own admission, is at least 18 percent higher.

"You would expect most central bankers, and particularly guys like Alan Greenspan, to be shareholder-friendly, but they are trying to rob us," says money manager Jean-Marie Eveillard. His $2.5 billion First Eagle SoGen Funds, based in New York, is BIS's largest private shareholder. Eveillard, a 61-year-old Frenchman who began accumulating BIS shares in 1984, wrote a letter of protest to Greenspan and sent a colleague to BIS headquarters in Basel to push for a review of the buyout's terms. He received no answer from Greenspan; BIS said that he could bring his case to a special tribunal at the Hague.

One New York court has already rejected Eveillard,s request to suspend the buyout. He awaits a verdict from a U.S. appeals court. In any event, the money manager won,t do badly. BIS's offer represents an 82 percent premium to the average price Eveillard paid for his shares and a 95 percent premium to the prebuyout price.