ZURICH – Credit Suisse is expected to face shareholder anger at what will be its final annual general meeting on Tuesday after the bank was rescued last month by rival UBS.
The hastily arranged takeover by Zurich-based UBS, for which Switzerland invoked emergency legislation, bypassed Credit Suisse shareholders, who would otherwise have had a say, and largely wiped out the value of their holdings.
The meeting marks an ignominious end for the 167-year-old flagship bank founded by Alfred Escher, a Swiss magnate affectionately dubbed King Alfred I, who helped build the country’s railways and then the bank.
Protesters gathered outside the concert venue where the meeting was taking place, with some erecting a capsized boat to depict the bank’s demise.
Shareholder advisory firm Ethos decried the “greed and incompetence of its managers” as well as pay that reached “unimaginable heights”, as it prepared to challenge top executives at the meeting.
“Shareholders have lost considerable amounts of money and thousands of jobs are on the line,” it said.
After years of scandal and losses, Credit Suisse came to the brink of collapse before UBS rode to the rescue with a merger engineered and bankrolled by the Swiss authorities.
The meeting is the first time that Chairman Axel Lehmann and Chief Executive Ulrich Koerner will publicly address shareholders since the takeover was announced.
Credit Suisse had been attempting to put the past behind it and restructure, before a shock triggered by the collapse of Silicon Valley Bank in the U.S. sent it into a spiral.
After a run on deposits, the Swiss government turned to UBS, which agreed to buy Credit Suisse for $3.3 billion, a fraction of its earlier market value.
The move angered not only shareholders but many in Switzerland.
A recent survey by political research firm gfs.bern found a majority of Swiss did not support the deal.
“The government’s use of emergency powers to push this deal through goes beyond legal and democratic norms,” said Dominik Gross of the Swiss Alliance of Development Organizations.
“Swiss taxpayers too are on the hook for billions of francs of junk investments and yet the government, FINMA and the central bank have given little explanation about the state’s 9 billion (franc) loss guarantee to UBS.”
One of the world’s biggest investors, Norway’s sovereign wealth fund said it would vote against the re-election of Lehmann and six other directors, in a public show of protest.
U.S. proxy adviser Institutional Shareholder Services (ISS) had earlier rebuked the bank’s management for a “lack of oversight and poor stewardship”.
In the lead-up to Tuesday’s meeting, Credit Suisse said it had withdrawn certain proposals from the agenda.
Those include the discharge of management, which is typically a bellwether of confidence. It also ditched plans for a special bonus linked to the bank’s transformation plan.
Credit Suisse’s near collapse also completely wiped out $17 billion of Additional Tier 1 (AT1) debt.
A group of AT1 investors has hired law firm Quinn Emanuel Urquhart & Sullivan to demand compensation.
Meanwhile, the office of the attorney general on Sunday said Switzerland’s Federal Prosecutor has opened an investigation into the Credit Suisse takeover.
The prosecutor is looking into potential breaches of Swiss criminal law by government officials, regulators and executives at the two banks.
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