Shareholders pressure Credit Suisse to absolve Greensill executives

Credit Suisse shareholders have pressured the bank not to include a vote at its annual general meeting that would absolve directors and executives of the Greensill scandal, according to people familiar with the discussions.

Investors in the Swiss group have raised concerns with new chairman Axel Lehmann over the board’s decision not to publish a report on the bank’s failures following the collapse of specialist finance company Greensill. last year, which caused Credit Suisse to freeze $10 billion in client funds.

“How can we let them off the hook when we don’t know all the details of what happened? says a shareholder.

The bank is due to release its agenda for the April 29 AGM in the coming days, after announcing this week that three directors, including vice-chairman Severin Schwan, would step down.

Under Swiss law, directors and officers of companies are liable to shareholders for misleading or inaccurate statements, as well as for damage caused to the company, intentionally or through negligence. Each year, shareholders are usually asked to vote to discharge them of their legal liability for the previous financial year.

But last year Credit Suisse did not include a vote of discharge at its general meeting, because it was the day after the collapse of Greensill and Archegos Capital, the family office whose implosion has caused Credit Suisse a $5.5 billion trading loss, the largest in its 166-year history.

At last year’s AGM, the board said it was “of the view that it is in the best interests of shareholders that this proposal not be considered until internal investigations are completed. on recent developments and the announcement of the corresponding result, and that a proposal to discharge the members of the board of directors and the management board for the 2020 financial year can be presented later”.

While last summer Credit Suisse released an excoriating report by law firm Paul Weiss on Archegos, last month it decided to keep a report on Greensill by Swiss law firm Walder Wyss secret. and the accounting firm Deloitte.

The Greensill report has been shared with Swiss regulator Finma, but the board has decided not to publish the full report or even provide details of its findings as it is wary of disclosing too much information that could harm it. in potential lawsuits or insurance claims as it seeks to recover lost funds.

In meetings with Lehmann in recent weeks, shareholders have lobbied to have the discharge vote removed from the agenda again because they believe they don’t have enough information about who was responsible at Credit Suisse. of Greensill’s losses, people familiar with the talks said. .

A person familiar with the company said the discharge votes were largely symbolic and did not prevent shareholders from suing executives and directors if information later came to light.

Among those whose responsibility has not yet been discharged for the 2020 and 2021 financial years are members of the current board of directors and management team, as well as former presidents Urs Rohner and António Horta-Osório, both left during the past year.

Also affected are outgoing and former directors such as Schwan and Andreas Gottschling, who resigned last year under pressure from shareholders, and several deceased executives, including Eric Varvel, the former head of the asset management business. , Brian Chin, the former head of investment banking, and Lara Warner, the former head of risk and compliance.

Credit Suisse has so far repaid $6.7 billion of the $10 billion initially frozen in Greensill-backed supply chain finance funds, while the bank holds another $600 million in cash which it plans to return to the more than 1,000 investors in the funds. .

The bank is trying to recover the remaining funds, most of which are owed by three groups: Sanjeev Gupta’s GFG Alliance, SoftBank-backed Katerra and Bluestone Resources, the US mining company owned by the governor of West Virginia. Jim Justice.

Credit Suisse also filed 11 insurance claims in its attempt to recoup the losses. The bank declined to comment.

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