PARIS (Reuters) ? Societe Generale is pursuing legal action against UK tabloid the Mail on Sunday over a story last month that alleged the French bank was on the verge of collapse, according to an internal staff memo seen by Reuters on Monday.
In an internal memo sent to staff on Friday, the bank said: "Legal action against the Daily Mail is pending and similarly legal action will be taken against anybody who spreads unfounded rumors about our company."
The Mail on Sunday story was part of a storm of rumors that hit SocGen in early August, sending the bank's shares down more than 20 percent in a single day as media and investors speculated about its financial solidity and exposure to Greek debt.
The newspaper (part of Daily Mail & General Trust Plc) had quickly retracted the August 7 story, saying: "We now accept that this was not true and we unreservedly apologize to Societe Generale for any embarrassment caused.
SocGen CEO Frederic Oudea declined to discuss the legal action during a conference call on Monday about the bank's plan to sell assets and cut costs to boost its capital reserves.
France's stock market regulator the AMF is investigation the market rumors that buffeted the bank in August.
French newspaper Le Figaro said in a report on its website on Monday that the bank had sent a summons to the paper on August 18, saying it had been harmed by the report and asking for damages.
The Mail responded with a letter acknowledging its fault and proposing to donate 1000 pounds ($1,589) to a charity of SocGen's choice, according to Le Figaro, without citing its sources, adding SocGen had rejected the proposal and asked for a million-pound donation instead.
Le Figaro said the two sides remained at odds and that SocGen could file a lawsuit in a London court for defamation if it did not get the outcome it wanted.
A spokesman for Daily Mail & General Trust declined comment.
(Reporting by Leila Abboud and Lionel Laurent; Editing by David Holmes)
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