Credit Suisse chairman apologizes to angry shareholders


by Noele Illien and John O’Donnell

ZURICH (Reuters) – Credit Suisse Chairman Axel Lehmann apologized to shareholders for driving the group to the brink of bankruptcy at the last general meeting in the Swiss bank’s history before its takeover by its rival UBS.

The takeover, hastily organized by the Swiss authorities, took place without the consent of Credit Suisse shareholders and largely to their detriment.

The general meeting marks the end of the history of Credit Suisse, an establishment founded 167 years ago by the Swiss magnate Alfred Escher, and which has been weakened in recent years by a series of financial scandals and losses.

This is the first time that Axel Lehmann and Chief Executive Ulrich Koerner have addressed shareholders publicly since the announcement of the acquisition by UBS for an amount of three billion Swiss francs, a fraction of the previous market value of Swiss credit.

Protesters gathered outside the hall where the GA was being held, some holding up a wrecked boat to illustrate the end of the bank.

President Axel Lehmann explained that he had run out of time to get the bank back on its feet, although he believed “until the beginning of the fateful week” that the Swiss establishment could survive.

“I’m really sorry,” he said. “I apologize for not being able to stem the loss of confidence.”

After years of scandals and losses, Credit Suisse was on the verge of bankruptcy before UBS came to its rescue with a merger engineered and financed by the Swiss authorities.

“Until the end, we fought to find a solution. But in the end, there were only two options: an agreement or bankruptcy. A reconciliation had to be done”, continued Axel Lehmann, adding that five members of the board of directors would not stand for re-election.

“INCOMPETENT” LEADERS

The purchase of Credit Suisse has angered shareholders, including the Norwegian sovereign wealth fund, which has indicated it will vote against the re-election of Axel Lehmann and six other directors in protest.

The shareholder advisory firm Ethos denounced Credit Suisse’s “greed and incompetence of the management” as well as remuneration reaching “unimaginable heights”. “Shareholders have lost huge sums and thousands of jobs are at risk.

A survey carried out by the gfs.bern firm revealed that a majority of Swiss did not support the operation.

“The government’s use of emergency powers to push through this deal goes beyond legal and democratic standards,” said Dominik Gross of the Swiss Alliance of Development Organizations.

“Taxpayers also have to pay for billions of francs of shoddy investments and yet the government, Finma (the market regulator) and the central bank have given little explanation on the guarantee of nine billion francs granted by the State to UBS”, he added.

Certain proposals which should have been on the agenda of the general assembly have been withdrawn, such as the management plan – generally considered as an indicator of confidence in management – or the special bonus project linked to the transformation plan of the bank.

The emergency takeover of Credit Suisse also resulted in the devaluation to nil of $17 billion of “Additional Tier 1” (AT1) debt, causing a stir among bond investors usually protected in the event of bankruptcy or bailout. emergency.

A group of investors in Credit Suisse’s AT1 debt has hired law firm Quinn Emanuel Urquhart & Sullivan to seek compensation.

The Swiss federal prosecutor’s office also said on Sunday that it had opened an investigation into the takeover of Credit Suisse by UBS to examine possible violations of Swiss criminal law by government officials, regulators and executives of the two banks.

(Report Noele Illien; Blandine Hénault and Laetitia Volga for the French version, edited by Kate Entringer)

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