NETHERLANDS - Asset manager Algemene Pensioen Groep (APG) has started its own legal proceedings against Banc of America (BofA), for what is believes is the withholding of vital information preceding the merger with US investment bank Merrill Lynch.

APG has filed a complaint on behalf of "one of its clients", the firm said in a statement, in order to recover subsequent losses incurred on BofA's shares and held by its clients.

And that client has now been confirmed by law firm Grant & Eisenhofer as ABP.

APG's biggest client - among 26 customers with €240bn in assets under management - is ABP, the €201bn industry-wide pension fund for civil servants and teachers.

APG claims BofA must have known about the record quarterly losses Merrill was facing but refrained from providing this vital information when BofA invited its shareholders to vote on the proposed merger on 5 December 2008.

"These losses were expected to exceed US$15bn (€10.9bn)," added the Algemene Pensioen Groep.

"BofA also withheld a secret addendum to the merger agreement about the bonuses to be paid to Merrill employees, worth up to US$5.8bn, prior to the closure of the deal, and even prior to the end of the year, before Merrill had calculated its quarterly or yearly figures," it continued.

In APG's opinion, shareholders would have rejected the merger, had this vital information been available.

"We have taken the initiative because we expect to gain more from our own legal proceedings, rather than to keep on participating in a class action case," explained Steger.

It's a view repeated by Jay Eisenhofer, managing director of Grant & Eisenhofer, on behalf of ABP.

"Bank of America's use of misleading proxy materials to solicit shareholder votes in seeking approval for the Merrill Lynch deal, led to the loss of billions of dollars of shareholder equity, " claims Eisenhofer.  

"Had the shareholders known all the facts, they would have been able to make a more informed judgment and possibly prevented a disastrous acquisition."

APG's Steger's indicated the losses incurred by APG's client are estimated to be worth between US$31m and US$90m.

APG is now actively monitoring legal procedures in the US and elsewhere following what it describes as corporate wrongdoing, and is assessing whether one of its principals has been financially affected as a shareholder.

"In the case of a substantial loss, we recommend they consider active involvement," APG added.

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