ING Direct 2008 Annual Report Download - page 254

Risk factors (continued)
Operational risks are inherent in our business.
Our businesses depend on the ability to process a large number of transactions efficiently and accurately. Losses can result from
inadequate personnel, inadequate or failed internal control processes and systems or from external events that interrupt normal business
operations. We also face the risk that the design of our controls and procedures prove to be inadequate or are circumvented. We have
suffered losses from operational risk in the past and there can be no assurance that we will not suffer material losses from operational
risk in the future.
Our business may be negatively affected by adverse publicity, regulatory actions or litigation with respect to the Company,
other well-known companies or the financial services industry in general.
Adverse publicity and damage to ING’s reputation arising from its failure or perceived failure to comply with legal and regulatory
requirements, financial reporting irregularities involving other large and well known companies, increasing regulatory and law
enforcement scrutiny of ‘know your customer’ anti-money laundering, prohibited transactions with countries subject to sanctions, and
bribery or other anti-corruption measures and anti-terrorist-financing procedures and their effectiveness, regulatory investigations of the
mutual fund, banking and insurance industries, and litigation that arises from the failure or perceived failure by ING to comply with legal,
regulatory and compliance requirements, could result in adverse publicity and reputation harm, lead to increased regulatory supervision,
affect our ability to attract and retain customers, maintain access to the capital markets, result in cease and desist orders, suits,
enforcement actions, fines and civil and criminal penalties, other disciplinary action or have other material adverse effects on us in ways
that are not predictable.
Because we are a Dutch company and because the Stichting ING Aandelen holds more than 99% of our Ordinary shares,
the rights of our shareholders may differ from the rights of shareholders in other jurisdictions, which could affect your
rights as a shareholder.
While holders of our bearer receipts are entitled to attend and speak at the General Meeting, voting rights are not attached to the bearer
depositary receipts. Stichting ING Aandelen (‘the Trust’) holds more than 99% of our Ordinary shares, and exercises the voting rights
attached to the Ordinary shares (for which bearer receipts have been issued). Holders of bearer receipts who attend – in person or by
proxy – the General Meeting must obtain voting rights by proxy from the Trust. Holders of bearer receipts and holders of the ADSs
(American Depositary Shares) representing the bearer receipts, who do not attend the General Meeting, may give binding voting
instructions to the Trust. The Trust is entitled to vote on any Ordinary shares underlying the bearer depositary receipts for which the Trust
has not granted voting proxies, or voting instructions have not been given to the Trust. In exercising its voting discretion, the Trust is
required to make use of the voting rights attached to the Ordinary shares in the interest of the holders of bearer receipts, while taking
into account:
our interests;•
the interests of our affiliates; and•
the interests of our other stakeholders.•
In such a way that all interests are balanced and safeguarded as effectively as possible. The Trust may, but has no obligation to, consult
with the holders of bearer receipts or ADSs in exercising its voting rights in respect of any Ordinary shares for which it is entitled to vote.
These arrangements differ from practices in other jurisdictions, and accordingly may affect the rights of the holders of bearer receipts or
ADSs and their power to affect the Company’s business and operations.
The share price of our bearer receipts and ADSs has been, and may continue to be, volatile which may impact the value of
our bearer receipts or ADSs you hold.
The share price of our bearer receipts and our ADSs has been volatile in the past, in particular over the past year. The share price and
trading volume of our bearer receipts and our ADSs may continue to be subject to significant fluctuations due, in part, to the high
volatility in the securities markets generally and more particular in shares of financial institutions. Other factors, besides our financial
results, that may impact our share price include, but are not limited to:
market expectations of the performance and capital adequacy of financial institutions in general;•
investor perception of the success and impact of our strategies;•
a downgrade or review of our credit ratings;•
potential litigation or regulatory action involving ING Group or sectors we have exposure to through our insurance and banking •
activities;
announcements concerning financial problems or any investigations into the accounting practices of other financial institutions; and•
general market circumstances. •
2.4 Additional information
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