Swiss prosecutors probe UBS-Credit Suisse deal ahead of bank’s AGM
The Swiss Federal Prosecutor has opened an investigation into the state brokered takeover of Credit Suisse by UBS, according to the Financial Times.
The newspaper reported that the prosecutor is looking into possible breaches of Swiss criminal law by government officials, regulators and bank executives.
“The Federal Prosecutor’s office wants to proactively fulfil its mission and responsibility to contribute to a clean Swiss financial centre and has set up monitoring in order to take immediate action in any situation that falls within its field of activity,” the authority told the Financial Times.
Over the years there have been “numerous aspects of events around Credit Suisse” that justified investigation, the prosecutor said. These needed to be analysed to “identify any crimes that could fall within the competence of the [prosecutor]”.
The deal has been very unpopular in Switzerland with the two largest political parties expressing discontent with the takeover. The junior house of the Swiss parliament has called for a parliamentary inquiry to be set up to examine the acquisition.
The news piles further woe on Credit Suisse, which is set to face a difficult annual general meeting on Tuesday. The AGM will be the first in-person meeting for four years and will take place in a 15,000 seater ice hockey stadium in Zurich.
The AGM is likely to be combative, taking place just weeks after the acquisition.
Ordinarily such a deal would have to secure shareholder approval, but the Swiss government bypassed these rules to close the deal sooner. The bank was acquired for just $3.25bn despite its market capitalisation being more than twice that.
A top 10 investor, Norges Bank Investment Management, Norway’s sovereign wealth fund, is set to vote against the re-election of chair Axel Lehmann and six other directors.
In a statement explaining its decision to vote against Lehman and the other directors, it said: “Shareholders should have the right to seek changes to the board when it does not act in their best interest.”
“We will consider whether the board has failed to act on material requests from shareholders, sought to circumvent shareholder proposals or implemented governance changes limiting shareholders’ rights without their approval,” it continued.
In addition to Lehmann, the fund is also opposing the re-election of Iris Bohnet, Christian Gellerstad, Shan Li, Seraina Macia, Richard Meddings and Ana Pessoa.
Following the merger, Credit Suisse also from the AGM, saying they were no longer necessary.
One was a so-called ‘discharge’ vote, which would absolve board members of legal responsibility for the last financial year. ‘Discharge’ votes are common in Swiss AGMs.
The other was a vote on a special CHF30.1m bonus, which would have been paid to the executive team for completing its five-year restructuring plan.
Norges was set to oppose the ‘discharge’ motion, as were proxy advisors ISS, Glass Lewis and Ethos Foundation.
Credit Suisse declined to comment.
UBS will host its AGM on Wednesday.