ZURICH – Credit Suisse is anticipated to face shareholder ire at its latest annual general meeting on Tuesday after the bank was bailed out last month by rival UBS.
The rapidly arranged takeover by Zurich-based UBS, for which Switzerland invoked emergency regulations, bypassed Credit Suisse shareholders who would otherwise have had a say and largely worn out the worth of their shares.
The meeting marks the ignominious end of the 167-year-old flagship bank founded by Alfred Escher, a Swiss magnate affectionately referred to as King Alfred I, who helped construct the country’s railroads after which the bank.
Protesters gathered outside the concert hall where the meeting was happening, and a few raised an overturned boat to depict the collapse of the bank.
Shareholder advisory firm Ethos denounced the “greed and incompetence of its managers” in addition to salaries that reached “unimaginable heights” because it prepared to tackle top executives on the meeting.
“Shareholders have lost significant amounts of cash and 1000’s of jobs are in danger,” it said.
After years of scandals and losses, Credit Suisse was getting ready to collapse before UBS got here to the rescue with a merger designed and funded by the Swiss authorities.
The meeting is the primary public speech by Chairman Axel Lehmann and CEO Ulrich Koerner because the announcement of the acquisition.
Credit Suisse tried to forget the past and restructure before the shock of the collapse of Silicon Valley Bank within the US sent it right into a downward spiral.
After the deposit round, the Swiss government approached UBS, which agreed to purchase Credit Suisse for $3.3 billion, a fraction of its former market value.
The move angered not only shareholders but many in Switzerland.
A recent poll by political research firm gfs.bern showed that a majority of Swiss people don’t support the deal.
“The federal government’s use of emergency powers to push through this deal goes beyond legal and democratic norms,” said Dominik Gross of the Swiss Alliance of Development Organizations.
“Swiss taxpayers are also on the hook for billions of francs in junk investments, yet little has been clarified by the federal government, FINMA and the central bank concerning the state guarantee of losses of 9 billion (francs) to UBS.”
One among the world’s largest investors, the Norwegian sovereign wealth fund, announced in a public protest that it might vote against the re-election of Lehmann and 6 other directors.
A U.S. attorney’s adviser to Institutional Shareholder Services (ISS) had previously rebuked the bank’s management for “lack of oversight and poor governance.”
In preparation for Tuesday’s meeting, Credit Suisse said it had withdrawn some proposals from the agenda.
These include a management discharge, which is often a harbinger of confidence. Plans for a special bonus related to the bank’s transformation plan were also abandoned.
The near collapse of Credit Suisse also completely erased $17 billion of Additional Tier 1 (AT1) debt.
The AT1 investor group hired law firm Quinn Emanuel Urquhart & Sullivan to hunt compensation.
Meanwhile, the Attorney General’s office said on Sunday that the Swiss Federal Prosecutor’s Office had launched an investigation into the takeover of Credit Suisse.
The prosecutor is investigating potential violations of Swiss criminal law by government officials, regulators and executives of each banks.