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    Clarifications Concerning Groupe Schneider's Belgian Shareholdings

    A nonexistent connection has been made in the media between two issues in Belgium. One involves accusations about the management of Groupe Schneider's subsidiaries Cofibel and Cofimines, and the other involves the activities of Mr. Valentino Foti. These two issues are entirely unrelated and making any connection between them creates misleading impressions about the reputation of Groupe Schneider and its CEO, Mr. Didier Pineau-Valencienne, and its activities in Belgium.

    Management of Cofibel and Cofimines

    In Belgium, Groupe Schneider and its Chairman and Chief Executive Officer have been accused of managing the Group's Cofibel and Cofimines subsidiaries for the sole benefit of their majority shareholder, which allegedly unduly used their financial resources to fund Groupe Schneider's own expansion.

    Groupe Schneider asserts that these accusations do not stand up against the facts.

    First, the total assets owned by Cofibel and Cofimines represent only around 3 % of Groupe Schneider's assets. As a result, these assets simply could not serve as a basis for the expansion of a Group that every year generates cash flow amounting to three times the value of Cofibel's and Cofimines' assets.

    Second, between 1981 and 1993, the total net asset value per share of Cofibel was multiplied by 3.75 times and that of Cofimines by 2.75 times. The price paid to shareholders who tendered their shares in the public offers for these companies was 4.25 times the 1981 share price of Cofibel and 4.60 times that of Cofimines. Between 1981 and 1993, the general index of the Brussels Bourse showed comparable growth, increasing 4.59 times.

    Finally, since 1989, Groupe Schneider has invested BEF 2.2 billion (FRF 360 million) in its Cofibel and Cofimines subsidiaries. Since 1990, these companies have spent BEF 3.8 billion (FRF 620 million) on new assets, as part of Groupe Schneider's general strategy. As of May 15, 1994, these BEF 3.8 billion in assets were worth BEF 4.9 billion (FRF 800 million), or nearly 30 % more.

    These facts clearly establish that relations between Groupe Schneider and its Belgian financial subsidiaries were not managed for the sole benefit of the majority shareholder and to the detriment of other shareholders.

    The activities of Valentino Foti

    During the past two days, damaging rumors have been revived linking Groupe Schneider and its Chairman and Chief Executive Officer with money laundering activities. These rumors seem to be based on the ties established between Cofibel/Cofimines and Mr. Valentino Foti's group, via the PB Finance company.

    Groupe Schneider denied these rumors in no uncertain terms last October, when it brought suit for slander. It categorically reaffirms this denial today.

    In particular, in response to these false allegations, it is important to remember that:

    - Neither Mr. Pineau-Valencienne nor any other Groupe Schneider executive has ever been an officer or director of PB Finance.

    - Cofibel and Cofimines became strictly minority shareholders of PB Finance in 1988 and today no longer own any shares at all in the company.

    - PB Finance was totally and exclusively managed in concert by Mr. Foti and its Executive Director Mr. Jean Verdoot.

    - The official receivers of PB Finance appointed at the initiative of Cofibel and Cofimines stated that they had found nothing unusual in the accounts.

    As a result, Groupe Schneider most solemnly reaffirms its denial of these rumors, which gravely dishonor its reputation and the reputation of its Chairman and CEO.

    Press Contact:
    Schneider Electric
    Véronique Moine
    Tel. +33 (0)1 41 29 70 76
    Fax +33 (0)1 41 29 71 95