The world’s largest sovereign wealth fund has backed calls for a special audit at Credit Suisse and warned it would not absolve executives and board members of blame for several scandals as pressure mounts on Swiss lenders to overhaul their senior management.
The $1.3 trillion Norwegian oil fund, which is one of Credit Suisse’s top 15 shareholders with a 1.3 percent stake, will vote against the discharge of the board and top executives at Friday’s annual meeting from legal liability for fiscal 2020, it said in an announcement of its voting intentions on Sunday.
That’s raising the temperature on the bench as the two most influential proxy advisors, ISS and Glass Lewis, recommended the same stance this month.
The wealth fund and shareholder advisors are reluctant to absolve the lender’s board of wrongdoings related to the collapse of supply chain finance firm Greensill and Archegos Capital, the family office whose implosion caused a $5.5 billion trading loss, the largest of the bank in its 166-year history.
However, the oil fund went a step further than the proxy groups, backing a shareholder proposal by the Ethos Foundation to appoint an independent special auditor to investigate the financial losses in the supply chain related to Greensill and the “Swiss Leaks” affair, in which Details of the accounts held by the lender in connection with serious crimes were uncovered.
Credit Suisse investors were trying to persuade chairman Axel Lehmann not to vote on the discharge of the board of directors at the annual meeting, the Financial Times reported last month.
This was in protest at the board’s decision not to issue a report on the flaws surrounding last year’s Greensill collapse, which resulted in Credit Suisse freezing $10 billion in client funds, 2 of which $.7 billion remains to be recovered.
The oil fund, along with ISS and Glass Lewis, have recommended voting against discharging directors for 2020 but will vote for 2021. He significantly reduced his stake in the Swiss lender over the past year, reducing it from 3.4 percent at the end of 2020.
Credit Suisse has been embroiled in several scandals, including the collapse of Greensill and Archegos, the “Swiss Leaks” affair, the departure of ex-Chairman António Horta-Osório after violating Covid-19 quarantine restrictions and overuse of the corporate jet , filed charges of dealing with a group of cocaine-smuggling Bulgarian mobsters and paid $475 million in fines to settle Mozambique’s “tuna bond” scandal.
According to Swiss law, directors and executives are liable to shareholders for misleading or incorrect information and for damage to the company caused intentionally or negligently. Shareholders are typically asked to vote each year to release them from their legal liability for the previous financial year.
Last year, the bank did not take a discharge vote at its annual meeting, as it came immediately after the collapse of Greensill and Archegos. While the vote is largely symbolic, it is an important barometer of how shareholders feel about how a company is run.
The Norwegian oil fund is looking to environmental, social and governance issues to boost what it sees as weak returns over the next decade and has already voted against Apple on its wage policy this year.
Separately, Swiss newspaper NZZ said on Sunday that Credit Suisse would replace its three longest-serving executives – chief legal officer Romeo Cerutti, finance director David Mathers and Asia-Pacific regional chief Helman Sitohang.
The bank said senior management “regularly” reviews “executive appointments to specific positions” but that “no board decisions have been made.”
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