Credit Suisse lets shareholders vote to remove operator liability
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Group AG shareholders protested Friday, refusing to remove executives’ liability from recent financial mishaps, even as the bank’s chairman and chief executives find way to reassure shareholders that the organization can change culture and turn a corner.
In what is usually a routine vote to insulate bank officials from lawsuits, about 60% of the shares voted against Credit Suisse for removing them from liability in 2020. Binding Voting Highlights investor’s deep dissatisfaction with the scandal-prone Credit Suisse, including more than 5 billion dollars it lost from the family office of Archegos Capital Management the stock positions have soured.
Exemption means that shareholders cannot then sue the board unless there is new information that was not known at the time. The vote is largely seen as approving the board’s and senior management’s performance for the year. By voting against this proposal, shareholders have the right to sue the board.
Credit Suisse said it will review the response and see if further action is needed.
The bank won a separate vote to avoid conducting a special audit of its handling of its financial counterpart, Greensill Capital. Greensil bankruptcy in March 2021, which risks billions of dollars invested in a fund Credit Suisse operates through an asset management arm. About 88% of voters did not support the proposal submitted by an organization representing the Swiss pension fund.
A shareholder vote to remove the liability board was skipped last year while Credit Suisse assessed the damage from the twin scandal. Bank release a report in July on a law firm’s Archegos but said it would not issue the Greensill report because it could hurt their chances of recovery. Shareholders remove liability for moderators in 2021.
The Greensill issue was removed from both accountability votes because the report was not made public.
Shareholders were unable to attend Friday’s meeting because of the risk of coronavirus transmission. But some have submitted written questions ahead of time, asking Chairman Axel Lehmann why the bank is hit with bad news after bad news, and whether more managers should leave or give up their pay.
Mr Lehmann said the risk across the bank is now lower after a review last year and most of the executive team has now changed. After Archegos, several executives have been pushed out and many more said earlier this week that they plan to leave or retire.
On Wednesday, Credit Suisse second consecutive quarterly loss and said rising legal costs are weighing on its outcome.
Mr. Lehmann Friday told Credit Suisse shareholders to do better at anticipating risk, while reconnecting with the Swiss heritage and values of entrepreneurial founder Alfred Escher from 166 years ago.
Write to Margot Patrick at [email protected]
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Appeared April 30, 2022, print edition titled ‘Credit Suisse loses investor vote on liability.’