Credit Suisse’s chairman, António Horta, has been forced to resign after he was found guilty of misleading shareholders about the sale of a private jet. The bank took in $3 billion from selling shares and will have all these revenues taken away due to a fraud investigation by authorities. Three years ago it was revealed that Credit Suisse had bought an empty plane for over 200 million euros at the time when they were publicly denying such expenditures.
António Horta-Osório travelled to London and Lisbon for work meetings and business events after transferring to Zurich last spring to lead Credit Suisse Group AG CS -1.83 percent as chairman, then spent time with his family at their respective residences.
According to those acquainted with the flight, a private jet paid for by Credit Suisse dropped him there on a Thursday on many times and returned empty to Switzerland. Mr. Horta-Osório was picked up by a jet on Monday for employment in Zurich.
A business assessment of his travel revealed the empty planes, as well as Covid-19 quarantine violations in Switzerland and the United Kingdom. The aircraft were chartered, according to a source close to Mr. Horta-Osório, and they couldn’t wait until the weekend. The individual further said that no bank regulations regarding the usage of planes had been breached.
According to sources familiar with the board, the trip evaluation provided fuel for Credit Suisse executives who pushed for Mr. Horta-resignation, Osório’s causing his other board members to refuse to support him. His departure was announced by the bank earlier this week.
Credit Suisse’s headquarters in Zurich. In 1856, a Swiss entrepreneur established the bank to boost trade.
Mr. Horta-Osório had pledged to repair a badly damaged Credit Suisse. He arrived only weeks after the bank was shaken by the failures of two of its clients, Greensill Capital and Archegos Capital Management. The financier, who was born in Portugal, has a reputation for getting things done. He was knighted in the United Kingdom for reorganizing Lloyds Banking Group PLC during the financial crisis.
During his short time at Credit Suisse, Mr. Horta-Osório oversaw a wide reduction in risk-taking and assisted in the recruitment of new executives.
According to sources familiar with the bank, he also alienated longstanding executives by criticizing Credit Suisse’s procedures, remuneration, and litigation plans. According to sources acquainted with the board, several board members heard complaints about how Mr. Horta-Osório interacted to personnel and about situations when people felt uncomfortable because he didn’t always wear a mask at the bank despite Covid-19-related guidelines.
Mr. Horta-Osório paid the price when information about his jet usage and quarantine violations was leaked to the Swiss and worldwide press prior to his resignation.
Novak Djokovic defeated Matteo Berrettini in the Wimbledon men’s tennis final, which António Horta-Osório and numerous family members watched.
Photo credit: Getty Images/Pool
An all-day athletic excursion in July also stood out for the board, according to persons acquainted with the board. Mr. Horta-Osório and numerous family members attended the Wimbledon men’s tennis final, when Novak Djokovic defeated Matteo Berrettini, and then went to Wembley Stadium in north London to witness Italy defeat England in the UEFA European soccer championship final.
According to those acquainted with his travel, he informed the bank that the tickets were purchased for customers who had cancelled at the last minute. According to public ticket pricing, the total cost for the day was in the tens of thousands of dollars.
When Mr. Horta-Osório went to the two gatherings, he wasn’t meant to be out and about in coronavirus-free England. According to a source close to Mr. Horta-Osório, he flew into the nation incorrectly assuming Credit Suisse had secured him an exemption from a 10-day quarantine.
In 1856, a Swiss entrepreneur formed Credit Suisse to boost business. It had evolved into a powerhouse on Wall Street and in fast-growing Asian markets by the turn of the 2000, producing substantial rewards for stockholders.
Then came a slew of scandals. In recent years, civil disputes involving toxic mortgages have cost the United States billions of dollars in settlements. Last year, a unit admitted to cheating investors in a $850 million loan transaction for a Mozambique state-owned corporation in the United States.
Tidjane Thiam, the former CEO of Credit Suisse, resigned in 2020 after failing to limit the repercussions from a surveillance scandal.
Getty Images/Fabrice Coffrini/Agence France-Presse
Former Chief Executive Tidjane Thiam, another Mr. Fix-it who arrived through London, left in 2020 after failing to limit the reputational repercussions from a surveillance controversy ignited when a former top executive discovered the bank was following him.
Mr. Horta-Osório publicly said on his first day, April 30, that the bank’s difficulties were unlike anything he had ever seen at a corporation.
According to current and former Credit Suisse employees, the statements rang out as an insult to bankers, traders, and other staff who saw themselves as defenders of the bank’s peculiar Swiss-American DNA of can-do and discretion.
Mr. Horta-Osório enlisted the help of senior lieutenants and implemented his Lloyds strategy. He headed out to learn more about Credit Suisse’s worldwide presence and meet with employees, customers, investors, and regulators in person.
From his new headquarters in Zurich, he flew to New York, Qatar, Singapore, and London, as well as to Spain and Portugal, which haven’t historically been important markets for Credit Suisse. In November, he spoke at a Portuguese banking conference in Lisbon before flying to London to meet a job applicant.
People surrounding Mr. Horta-Osório thought the private jet trip was justified since he was establishing trust and demonstrating commitment.
The Omicron coronavirus strain erupted in the United Kingdom in late November. Travelers from Switzerland were subjected to a quarantine, which caught Mr. Horta-Osório on his way back from London. According to those aware with his trip, he secured a government waiver via a health consultant working for Credit Suisse so that he could go to the office for meetings. The waiver was denied, and Mr. Horta-Osório went to meetings in Madrid a few days later, ignorant that Swiss quarantine restrictions prevented him from leaving.
According to a source close to him, he only realized his mistake after details of the trip surfaced in the Swiss tabloid Blick.
Switzerland has a complicated social and commercial code that might be difficult to understand for newcomers. According to individuals who have worked at the bank, those who succeed are entitled to a life of riches and comfort, but it should never make headlines or be on show in times of crisis. Also, stick to the regulations.
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According to many who worked there, the specific to Credit Suisse is to conduct impeccably inside Switzerland, where Credit Suisse is a pervasive commercial and retail bank.
Changes advocated by Mr. Horta-Osório had some in the highest echelons concerned.
There were rumors that Eric Varvel, the bank’s 31-year veteran, was departing. He was the head of Greensill’s asset management section, which managed $10 billion in investment funds. When Greensill went bankrupt, the monies had to be frozen. Credit Suisse is attempting to reclaim all of the funds’ funds.
According to those acquainted with his work, he was also regarded as a legend inside the bank for securing his home with a bat during riots in Indonesia and convincing investors in Saudi Arabia and Qatar to infuse billions of dollars into Credit Suisse during the 2008 financial crisis.
According to those acquainted with the bank, it was Chief Executive Thomas Gottstein who informed Mr. Varvel he had to go, but it was Mr. Horta-Osório who made it plain it had to happen. Mr. Varvel announced his resignation on December 20.
According to those acquainted with the situation, there was also rising friction with the bank’s chief counsel, Romeo Cerutti, who had held the top legal position since 2009. According to some sources, Mr. Horta-Osório saw the lawyer as damaged since he had worked at the bank through a lot of crises.
Credit Suisse employees gathered pages of Mr. Horta-flight Osório’s logs and costs and sent them to legal firms for evaluation. Swiss regulators were also given access to the material. The Swiss press started to report on his location. On his way back from a business trip in Singapore, he stopped in the Maldives to join his wife on holiday.
According to a source close to Mr. Horta-Osório, he departed Singapore a day early so that another executive might accompany him on the aircraft back to Zurich.
Romeo Cerutti, Credit Suisse’s general counsel, has been the company’s top lawyer since 2009.
Bloomberg News/Bloomberg News/Andrew Harrer
Credit Suisse discovered he had escaped quarantine while at Wimbledon, according to Reuters shortly after Christmas. According to persons acquainted with the board, board members who granted Mr. Horta-Osório a pass on the Switzerland episode were dissatisfied.
Severin Schwan, the senior independent director at Credit Suisse, is also the CEO of Roche Holding AG, which raises the stakes for him to comment on the issue as the CEO of a health firm. According to sources familiar with the board, Mr. Schwan helped set the tone for other board members by considering the violations as severe.
Some board members were reportedly put off by Mr. Horta-usage Osório’s of a private plane and participation at sporting events. According to sources acquainted with the board, several believed Mr. Horta-Osório wasn’t completely candid about his conduct.
Credit Suisse has a successor waiting in the wings. Axel Lehmann, a Swiss former UBS executive who joined Credit Suisse’s board in October, was elected chairman on Jan. 17.
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