A Belgian investment company has launched legal action against Dexia and its chief executive, arguing the Franco-Belgian financial group misled investors before its state bailout in October.

Lynx Capital bought 5,350 Dexia shares on Sept 5 for prices varying from 1.358 to 1.478 euros, according to lawyer Robert Wtterwulghe. Dexia's shares have subsequently fallen to 0.33 euros.

In its deposition, the company says that Dexia Chief Executive Pierre Mariani and Chairman Jean-Luc Dehaene issued a series of reassuring statements about the group's financial health in the period up to Sept 2011.

But after the October bailout, Dehaene recalled arriving with Mariani to take charge of the group after a first rescue in 2008 to be told by Mariani that Dexia was 'not a bank, but a hedge fund'.

Wtterwulghe said this statement made it clear that Mariani knew from October 2008 that Dexia's position was precarious and that his subsequent reassurances were unfounded.

Dexia declined to comment.

Wtterwulghe said it was likely the Brussels commercial court would set an initial hearing at the end of January, with the case itself starting in May or June.

Dexia was rescued by Belgium, France and Luxembourg in October, with the three states providing guarantees for its borrowings and Belgium nationalising its Belgian banking activities.

The group is in the process of selling its businesses and will be left as a 'bad bank' holding bonds.

(Reporting By Philip Blenkinsop)