Investigation into Credit Suisse takeover by Switzerland’s attorney general
Switzerland’s federal prosecutor has launched an investigation into whether last month’s state-backed takeover of the stricken bank Credit Suisse by its bigger rival UBS broke Swiss criminal law.
The office of the attorney general said it was looking into potential breaches by government officials, regulators and executives at the two banks who thrashed out an emergency merger over a frantic weekend in mid-March to prevent a wider financial meltdown.
“In light of recent events, 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 area,” the Berne-based prosecutor said.
It wants to analyse the “numerous aspects of events around Credit Suisse” – including those reported in the media – to “identify and assess any crimes that could fall within the competence of the prosecutor”.
The office, led by the attorney general of Switzerland, Stefan Blättler, has been in contact with national and regional authorities and has issued a number of “investigatory orders” to gather information. Blättler’s office is expected to interview key officials about the takeover, but declined to comment further.
After growing concerns about the future of Credit Suisse, one of the 30 banks in the world deemed too big to fail, the Swiss government and the banking regulator forced through the takeover of the bank by UBS for almost $3.25bn (£2.6bn), well below its market value.
They stepped in after it became clear that a 50bn Swiss franc (£44bn) loan to Credit Suisse from the Swiss central bank had failed to halt the dramatic slide in its share price.
UBS, which has brought back its former boss Sergio Ermotti to oversee the takeover, wants to cut its workforce by as much as 30% after completing the deal, putting up to 36,000 jobs at risk, according to a report in Swiss newspaper SonntagsZeitung.
Ermotti takes the helm on Tuesday, the same day Credit Suisse is holding its annual meeting of shareholders in Zürich, where it is expected to face intense questioning by investors, as will UBS at its annual meeting in Basel the following day.
US investors in Credit Suisse have launched legal action, claiming that it overstated its prospects before its share crash. In the takeover, Credit Suisse’s AT1 bondholders, who held about $17bn of risky debt, were wiped out.
The merger, which will create a banking giant worth more than 5tn Swiss francs, has caused a public outcry and is opposed by three-quarters of Swiss citizens.
There is likely to be a heated debate when the Swiss parliament holds a special session between 11 and 13 April to discuss the takeover. The government has also agreed to absorb up to 9bn Swiss francs of potential UBS losses.
In total, state and central bank support for the merged entity adds up to 260bn Swiss francs – a third of Switzerland’s annual economic output.
Source: Theguardian.com