Credit Suisse shareholders rebuke management

Angered by a series of scandals and crises that have tarnished the reputation of Swiss banking giant Credit Suisse, shareholders on Friday meted out directors and officers with a rare rebuke.

Gathered virtually for the general meeting of the bank, 59.95% of the shareholders refused to release the management of its personal responsibility for the year 2020.

The so-called discharge vote is usually a formality at the bank’s annual shareholders’ meeting that allows the board and management to shield themselves from any legal action regarding their performance during the year. previous.

The vote on the 2020 discharge was due to take place a year ago, but was delayed due to the massive fallout from the implosions of financial services companies Greensill and Archegos, which cost the bank billions.

Several shareholder groups, including the Ethos foundation, which represents pension funds, had called on the shareholders of Switzerland’s second bank to reject the discharges for 2020 and 2021.

Two major U.S. proxy advisory services firms, ISS and Glass Lewis, had also recommended their members reject the 2020 discharge proposal.

But they had said the 2021 proposal was reasonable, with ISS pointing to “significant” changes to the board and management team.

Shareholders appeared to agree, with 77.5% of them voting in favor of the 2021 discharge.

Board chairman Axel Lehmann, whose position was overwhelmingly confirmed at the meeting, said he regretted the shareholders’ decision regarding 2020.

He said the council would now discuss the consequences that should follow.

Credit Suisse had committed some $10 billion to British financial firm Greensill, which went bankrupt in March 2021, while the implosion of US fund Archegos cost it more than $5 billion.

The bank faced other scandals.

Last October, it was also fined $475 million by US and UK authorities for its loans to state-owned companies in Mozambique.

Last November, Credit Suisse launched a three-year reorganization plan that significantly reduces its investment banking activities and refocuses on wealth management.

But soon after, the bank’s chairman for less than nine months, Antonio Horta-Osorio, who had championed efforts to improve risk management, resigned for breaking Swiss Covid rules.

Prior to Horta-Osorio’s arrival, the bank had also been rocked by a scandal over attempts to spy on former and current employees.

He also saw one of his former advisers on trial for alleged links to a Bulgarian drug-trafficking ring.

And then, last February, the bank was hit by an extensive investigation by dozens of media organizations into leaked data they said showed Credit Suisse held more than US$8 billion in accounts. of criminals, dictators and perpetrators of rights abuses.

Credit Suisse categorically rejected the “allegations and insinuations” of the investigation.

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