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After the supply chain finance fund related to Greensill Capital collapsed, Credit Suisse was facing increasing pressure from its valued customers to demand compensation for their losses.
The decision whether or not to do so was one of the first major problems faced by the new chairman, António Horta-Osório, in cleaning up the bank, which faced several collectives raised by angry investors. The threat of litigation.
UBS advisers and market sources told them that more than 1,000 Credit Suisse clients have invested in this $10 billion fund, claiming that they are low-risk products and have been fully insured against losses.
However, the Swiss lender suspended the funds in March, which packaged the invoices owed by Greensill customers into investment products. The bank’s customers could lose as much as $3 billion because several companies that invested in these bonds said they were unable or unwilling to repay these debts.
The UK’s Serious Fraud Office on Friday Investigate Enter Sanjeev Gupta’s metal empire, which borrowed $1.2 billion through the Greensill-related Credit Suisse fund.Last month, the “Financial Times” disclosed a series of Suspicious invoice Related to Gupta’s business.
Those investing in these funds include the former prime minister of Qatar, hundreds of Credit Suisse super-rich European and Asian clients, pension funds and listed companies.
Investors told the Financial Times that securities linked to unissued invoices contained securities, which violated the fund’s rules and marketing materials.
However, according to people familiar with internal discussions, the bank’s lawyers are confident that the wording in the fund’s documents implies the potential for investing in non-standard receivables.
A wealthy man said: “It still bothers me, they will not become clean.” And admitted that they should compensate the customers, he personally invested the funds, and runs a major transaction with Credit Suisse (Credit Suisse) company of. “The facts are clear, there is no future invoice.”
He added that he hopes Horta-Osório can decide to compensate customers, which is a repeat of the decision by the CEO of Lloyds Banking Group to compensate customers for misselling payment protection insurance.
The investor told the Financial Times: “Of course this will affect my relationship with the bank.” “Credit Suisse’s customer consultant told me that it’s not my fault. They agreed that senior management should take different actions to maintain The development of this relationship, but this relationship has been irreparably damaged.”
According to Bloomberg, the former prime minister of Qatar, Sheikh Hamad bin Jassim Al Thani (Sheikh Hamad bin Jassim Al Thani) invested US$200 million in Credit Suisse. Sheikh Hamad (Sheikh Hamad) was the head of the Qatar Investment Authority (Qatar Investment Authority). During the financial crisis, the sovereign wealth fund rescued Credit Suisse, and the Gulf countries were some of the bank’s Hometown of lucrative customers. A representative of Sheikh Hamad could not be reached for comment.
Credit Suisse declined to confirm whether participants in these funds will suffer any losses, but so far they believe they are professional investors who are aware of any risks.
CEO Thomas Gottstein (Thomas Gottstein) Say The scandal in March “is, of course, the issue of our supply chain fund investors,” rather than the bank itself.
The crash also put the company of Credit Suisse as an important investor in trouble.
Swiss diagnostic company Quotient Coronavirus detection kit, Invested 110 million US dollars in a supply chain fund, Regulatory filing “Any such losses should be borne by Credit Suisse and not by the company or other fund investors.” Credit Suisse Asset Management is the top five shareholders of Quotient, holding 6% of the shares.
Nam Tai Property, a Chinese company listed in the United States, invested US$150 million in the fund shortly after raising US$170 million through an emergency private placement in October last year. Hong Kong and Hong Kong Monetary Authority.
People familiar with the matter said that senior executives are cautious about compensating customers, worrying that this will weaken the bank’s ability to go bankrupt and potential legal proceedings against Greensail.
They are also worried that Finma, the Swiss financial regulator, will use the decision to repay professional investors as a precedent and force the bank to hold more capital.
While under pressure, several class-action lawsuits gathered the funds of dozens of ultra-wealthy investors in London and Zurich, including the lawsuits prepared by Boies Schiller Flexner and Quinn Emanuel. Bank legal proceedings.
Credit Suisse declined to comment.
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