A Credit Suisse Group AG bank branch in Bern, Switzerland, on Thursday, March 16, 2023.
Stefan Wermuth | Bloomberg | Getty Images
Shareholders are gathering at Credit Suisse‘s annual general meeting Tuesday to demand answers and accountability over its controversial takeover by UBS.
A police presence was established early Tuesday at the venue as shareholders began arriving in droves.
Swiss authorities brokered an emergency rescue of the stricken bank by its larger domestic rival for just 3 billion Swiss francs, over the course of a weekend in late March. It followed a collapse in Credit Suisse’s deposits and share price amid fears of a global banking crisis, but the deal remains mired in legal and logistical challenges. Neither UBS nor Credit Suisse shareholders were allowed a vote on the deal.
In a statement Sunday, the office of the attorney general confirmed that Switzerland’s Federal Prosecutor is investigating potential breaches of Swiss federal law by government officials, regulators and top executives at Credit Suisse and UBS.
Both banks declined to comment on Monday.
Commentators have highlighted the importance of the deal’s success for Swiss authorities against a febrile political backdrop. The lack of input from shareholders, bondholders and Swiss taxpayers in UBS’ acquisition of its embattled rival has sparked widespread anger.
Speaking outside the annual meeting, Vincent Kaufmann, CEO of Ethos Foundation which represents pension funds comprising between 3% and 5% of Credit Suisse shareholders, told CNBC that they had “lost a lot of money” and “need to know what management is doing.”
Potential courses of action include “trying to retrieve some of the viable pay that was granted for former management, who may have failed in their duties to protect shareholders’ interests,” he said.
“We’re still looking for possibilities — it’s quite difficult with the Swiss company law to prove the damage. Mismanagement of a company is not per se something we can concretely act against former members of the management or current members of the management, but still we need to be sure that they gave the whole truth to investors and to the market, so there is still open question,” Kaufmann told CNBC’s Joumanna Bercetche.
Holders of Credit Suisse’s AT1 bond instruments, which were subject to a $17 billion wipeout as part of the UBS takeover, last week instructed a global law firm to pursue discussion and possible litigation with Swiss authorities.
“There is still a chance that the various actors will recognize and correct the mistakes made in hastily orchestrating this merger,” Thomas Werlen, managing partner at Quinn Emanuel Urquhart & Sullivan, which is representing a “diverse array” of affected bondholders in Switzerland, the U.K. and U.S., said in a release Monday.
“While we are certainly prepared to pursue whatever proceedings are necessary, a potential constructive engagement with the relevant stakeholders could prevent years of litigation. That will be an important focus for us over the coming weeks.”
UBS announced last week that former CEO Sergio Ermotti would return to the helm of the new bank as it undertakes the huge task of integrating its fallen compatriot into its business.
UBS will hold its own AGM on Wednesday, with further clarity expected on plans for the new integrated lender. Swiss regulator FINMA will also hold a press conference on Wednesday.
Swiss newspaper Tages-Anzeiger reported Sunday, citing one source, that plans for the new entity include a 20%-30% cut to its combined global workforce.