(Xinhua)
Updated: 2008-04-18 22:47

PARIS - Societe Generale, the French bank that announced a major financial impropriety scandal early this year, Friday announced plans to replace Daniel Bouton, its long- serving chairman and CEO, as part of efforts to rebuild its reputation.

French bank Societe Generale's Chief Executive Daniel Bouton answers questions during an interview with Reuters at the Societe Generale headquarters in Paris February 20, 2008. [Agencies]

The board of directors "on proposal of Daniel Bouton has finally decided to separate the functions of the chairman of the board and CEO, during its next meeting scheduled to be held on May 12," according to a statement issued by the French bank.

Bouton, 58, will be ending a 15-year run as the bank's top executive, but will remain the group chairman after the bank's creates two posts to be shared among two people in a bid to improve governance, according to the statement.

To be replaced by Deputy CEO Frederic Oudea, promoted only last month from chief financial officer Bouton, Bouton was at the center of a firestorm that erupted at the bank in late January after it announced losses of almost 5 billion euro (about US$ 7.4 billion) in a scandal that has been blamed on a single rogue trader, Jerome Kerviel.

In the wake of the huge scandal, the largest in France's financial history, the bank's board twice rejected Bouton's offers to resign, despite calls from prominent French personalities including President Nicolas Sarkozy for top executives to face up to the "consequences" of the huge losses.

Recently released from jail pending further investigation, Kerviel has maintained that his superiors must have known what he was doing but that they chose to look the other way when he was making money.

According to the preliminary charges filed by French authorities, the rogue trader is to set to stand trial for breach of trust, forgery and unauthorized computer activity.

"It is a compromise between the need for change and the maintenance of continuity," said an internal source at the bank, commenting on the possible appointment the 44-year old Oudea as group's CEO.

"It preserves the legitimacy of Daniel Bouton as guardian of the independence of the bank and brings new blood into raising someone who was less exposed publicly than Daniel Bouton," said the same source.