Credit Suisse CS 1.36%
Group AG shareholders revolted on Friday, refusing to release executives from legal liability from recent financial mishaps, even as the bank’s chairman and CEO tried to reassure shareholders that the institution could change its culture and turn a corner.
In what is usually a routine vote to isolate bank officials from lawsuits, about 60% of the voting shares went against Credit Suisse to release them from legal liability in 2020. The binding vote highlights investors’ deep dissatisfaction with scandal-ridden Credit Suisse, including more than $ 5 billion, it lost from the family office Archegos Capital Managements acidified stock positions.
Exemption from liability means that shareholders can not later sue the Board of Directors unless new information emerges that was not known at the time. The vote is largely seen as an approval of the performance of the Board of Directors and senior management during the year. By voting against the proposal, the shareholders reserve the right to sue the Board of Directors.
Credit Suisse said it would reflect on the feedback and see if further action is needed.
The bank won a separate ballot to avoid conducting a special audit of its handling of a financing partner, Greensill Capital. Greensill went bankrupt in March 2021, putting billions of dollars at risk in investments in funds run by Credit Suisse through an asset management arm. About 88% of voters did not support the proposal made by a Swiss fund representing pension funds.
A shareholder vote to clear the board of liability was skipped last year, while Credit Suisse assessed the damage from the twin scandals. The bank released a report in July on Archegos by a law firm, but has said it will not release the Greensill report because it could hurt its ability to recover assets. Shareholders acquitted executives of liability over 2021.
The Greensill case was excluded from both liability polls as the report has not been made public.
Shareholders were unable to attend Friday’s meeting due to risks of coronavirus infection. But some asked written questions in advance, asking board chairman Axel Lehmann why the bank was plagued with one piece of bad news after another, and whether more executives should go or give up their salaries.
Sir. Lehmann said risks across the bank are lower now after a review last year and that most of the executive has changed now. After Archegos, several executives were pushed out, and several said earlier in the week that they were planning to leave or retire.
On Wednesday, Credit Suisse reported another quarterly loss in a row, saying rising legal costs weighed on the result.
Sir. Lehmann told shareholders on Friday that Credit Suisse must do better in anticipating risks and reconnecting with its Swiss heritage and the values of its entrepreneurial founder Alfred Escher from 166 years ago.
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Appeared in print on April 30, 2022 as’ Credit Suisse loses investors’ vote on legal liability ‘.