Credit Suisse Faces Anger At Final Shareholder Meeting
Credit Suisse will face shareholder anger on Tuesday at what will be its final annual general meeting after the bank was rescued last month by Swiss rival UBS. The hastily-arranged takeover by Zurich-based UBS, for which Switzerland invoked emergency legislation, bypassed Credit Suisse shareholders, who would otherwise have had a say, and largely wiped out the value of their holdings. Tuesday’s shareholder meeting marks an ignominious end for the 167-year-old flagship bank founded by Alfred Escher, a Swiss magnate affectionately dubbed King Alfred I, who helped build the country’s railways and then Credit Suisse. After years of scandal and losses, Credit Suisse came to the brink of collapse before UBS rode to the rescue with a shotgun merger engineered and bankrolled by the Swiss authorities. The meeting is the first time that Chairman Axel Lehmann and Chief Executive Ulrich Koerner will publicly address shareholders since the takeover was announced. Credit Suisse had been attempting to put the past behind it and restructure, before a shock triggered by the collapse of Silicon Valley Bank in the U.S. sent it into a spiral. After a run on 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 earlier market value. 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. U.S. proxy advisor Institutional Shareholder Services (ISS) had earlier rebuked the bank’s management for “lack of oversight and poor stewardship”.
In The Lead Up to Tuesday, Credit Suisse Said.
it had withdrawn certain proposals from the meeting’s agenda. Those include the discharge of management, which is typically a bellwether of confidence. It also ditched plans for a special bonus linked to the bank’s transformation plan. Credit Suisse’s near collapse not only wiped billions of Swiss francs off the value of its shares. It also completely wiped out $17 billion of Additional Tier 1 (AT1) debt. A group of AT1 investors has hired law firm Quinn Emanuel Urquhart & Sullivan to demand compensation. Meanwhile, the office of the attorney general on Sunday said Switzerland’s Federal Prosecutor has opened an investigation into the Credit Suisse takeover. The prosecutor is looking into potential breaches of Swiss criminal law by government officials, regulators and executives at the two banks.