DSB owner created a financial empire and lost it

Dirk Scheringa, the owner of the DSB Bank that was put under curatorship by the Netherlands' central bank on Monday, started his financial empire as a police officer who made extra money doing his colleagues' taxes.

Simple, common and nice, is how people refer to Dirk Scheringa, the founder and owner of the DSB Bank that was put under central bank control on Monday. He has always cherished the image of 'a guy who wasn't changed by success'.

People who meet him see a modest and soft-spoken man with a permanent smile. He was always open to the media. He welcomed camera crews into his museum of magic realism, his football club and the local bar where he plays a card game once a week. The classic example he uses to show his simple roots are the grey woolly socks he still wears under his suits.

But there is another side to Scheringa. He is vain, pushy, wants to be the best and the biggest at everything. He is full of pretentions. He boasted that his football team AZ would win the league, that his ice skating team would be world champion, that his museum of would be "the best in the Netherlands", and his bank "the best consumer bank in the Netherlands".

When he first appeared in the Quote500 rich list in the 1990s he sent a stiff fax to the editors rectifying that he was not worth a couple of 100 million guilders but at least 2 billion.

Other side

Employees, and especially former employees, know him as an unscrupulous, tough business man. He is not one to look for compromise in a conflict situation; he chooses confrontation. Some labour disputes with people of AZ took place out in the open. Keeper Oscar Moens and manager Willem van Hanegem said he played foul by telling the media details about their ample incomes.

Scheringa (59) started his financial career as a policeman with a thing for numbers. He helped fellow officers fill out their tax forms for 30 guilders (14 euros) a person. From that he started to build his emporium of consumer credit. Since the 1990s he actively advertised loans on TV and in magazines under different company names.

In 2000 he prepared the IPO for his company. The offering was supposed to bring the ultimate recognition from the financial elite who Scheringa felt always treated him with a certain disdain.

The flotation would have definitely made Scheringa a multi-millionaire, the sale of 5 million shares should have yielded between 97 and 122 million euros, while he would still keep a majority share of 67 percent worth up to 620 million.

But the IPO was cancelled at the last moment and the reasons were never clarified. Scheringa himself said not enough private individuals had signed up and he always wanted DSB to be "of the people". It has been said that Rabobank, the lead bank at the offering, found skeletons in the closet and lowered the price of the shares. This would have left Scheringa with less money than he had hoped for.

Centre stage

His second attempt for recognition was more successful. In 2007 he convinced Gerrit Zalm, the former finance minister, to accept a seat on his board of directors. Zalm's reliability would rub off on the bank that had come under criticism for the usurious single-premium insurance policies that came with its loans and mortgages and aggressive sales methods it used.

When Zalm, by then CFO, left DSB for newly nationalised ABN Amro, Scheringa gave an interesting spin to the developments. He sent out a press release saying he had let Zalm go to help out finance minister Wouter Bos, in the national interest.

It was not the last time Scheringa claimed centre stage during the financial crisis. Last spring he offered his services as "crisis minister plenipotentiary for finance" after he pointed out that DSB was one of the few banks not hit by the toxic American mortgages loans.

But in the end it was the practices at his own bank that led Pieter Lakeman, the chairman of a foundation of people who felt duped by DBS's mortgage constructions, to call on savers to withdraw all their money. The subsequent run on the bank made the central bank intervene on Monday after it failed to sell parts of DSB to other Dutch banks.

Scheringa's part is now played out, even at his own bank.