Another major setback for Credit Suisse. A Singapore commercial court on Friday ordered the bank bought in March by UBS to pay $926 million to former Georgian Prime Minister Bidzina Ivanishvili (2012-2013) for failing to protect its assets.
According to the court, Credit Suisse failed in its obligation to prevent these financial assets from being affected by the fraudulent transactions of a former financial advisor to the bank, Patrice Lescaudron. The latter was sentenced in Switzerland to five years in prison in 2018 for fraud and use of forgery.
The story began in 2004. Bidzina Ivanishvili and one of his partners are selling a Russia-based metallurgical complex for $1.6 billion. In the process, Credit Suisse contacted the Georgian billionaire to offer him to manage his wealth. Ivanishvili accepted and entrusted the Swiss bank with the management of more than $1 billion, placed in a trust in 2005.
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But, according to the court, Patrice Lescaudron allocated several million dollars to other investments until 2015 and the discovery of his fraudulent activities. Credit Suisse announced Friday that it will appeal the decision. "The judgment issued today is erroneous and raises significant legal issues," the bank said in a statement.
But she is not at the end of her troubles in this case. Russian oligarch Vitaly Malkin has also filed lawsuits against her for losses of 500 million Swiss francs (491 million euros) attributed to the actions of Patrice Lescaudron.
Credit Suisse has been embroiled in a long series of costly scandals in recent years that have led to its demise. To avoid bankruptcy, the bank was absorbed in March by its rival UBS, at the request of the Swiss authorities. In the end, the operation was rewarding for the Swiss state. It earned about 100 million Swiss francs (103 million euros) from the sums lent to Credit Suisse during its rescue, Finance Minister Karin Keller-Sutter said on Friday.