He Credit Suisse president apologized for bringing the Swiss bank to the brink of bankruptcyin the face of the fury of the shareholders due to the crisis of what was their proud flagship.
The hasty takeover by Zurich-based UBS, for which Switzerland resorted to emergency legislation, was made outside of the shareholders of Credit Suisse, who otherwise would have had a say, and largely wiped out the value of their holdings.
Tuesday’s shareholders’ meeting, the last, marks a ignominious end for the 167-year-old bank founded by Alfred Escher, a Swiss magnate affectionately nicknamed King Alfred I, who helped build the country’s railways and later the bank.
Protesters gathered in front of the concert hall where the meeting was held, some erecting an overturned boat to illustrate the bank’s demise.
Inside the compound, Chairman Axel Lehmann apologized, saying his time was up to turn the bank around, even though he believed “until the start of the fateful week” that it might survive.
“Very sorryLehman said. “I apologize for not being able to stop the loss of trust”.
After years of scandals and lossesCredit Suisse was on the verge of collapse before UBS came to the rescue with a merger designed and financed by the Swiss authorities.
“Until the end, We fight hard to find a solution. But in the end there were only two options: the merger agreement or bankruptcy. The merger had to go ahead”.
Shareholder advisory firm Ethos denounced the “greed and incompetence of its managers” as well as salaries reaching “unimaginable heights” as it prepared to challenge top executives at the board.
“Shareholders have lost considerable amounts of money and thousands of jobs are at risk“, he claimed.
FIRST PUBLIC INTERVENTION
The meeting is the first time that Chairman Lehmann and CEO Ulrich Körner have addressed shareholders publicly since the acquisition.
Credit Suisse had tried to put the past behind it and restructure, before a shock from the Silicon Valley Bank bankruptcy in the United States caused him to enter a spiral.
After a massive withdrawal of deposits, the Swiss government turned to UBS, which agreed to buy Credit Suisse for 3 billion Swiss francs ($3.3 billion), a fraction of its previous market value.
The operation angered not only the shareholders, but also many Swiss. A poll carried out by the political analysis company gfs.bern revealed that the majority of Swiss did not support the operation.
“The use of emergency powers by the Government to promote this operation goes beyond legal and democratic normssaid Dominik Gross of the Swiss Alliance of Development Organizations.
“Swiss taxpayers are also paying billions of francs of junk investments, and yet the government, regulator FINMA and the central bank have given little explanation about the state’s 9 billion francs loss guarantee to UBS.”
One of the world’s biggest investors, Norway’s sovereign wealth fund, said it would vote against the re-election of Lehmann and six other directors in a public show of protest.
The US voting advisor Institutional Shareholder Services (ISS) had already rebuked the bank’s management for its “lack of supervision and mismanagement”.
On the eve of Tuesday’s meeting, Credit Suisse said it had withdrawn some proposals from the agenda. These include discharge, which is often an indicator of confidence. Plans for a special premium linked to the bank’s transformation plan were also withdrawn.
Credit Suisse’s near-collapse also wiped out $17 billion worth of additional Tier 1 debt (AT1).
A group of AT1 investors has retained the law firm of Quinn Emanuel Urquhart & Sullivan to demand compensation.
For its part, the Attorney General of the Confederation has opened an investigation into the acquisition of Credit Suisse.
(With information from Reuters/By Noele Illien and John O’Donnell)
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