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Some of the main shareholders of Credit Suisse will try to remove the member of the board in charge of supervising the risk, in protest against twin scandals which have cost the bank and its customers billions and tarnished their reputation.
Andreas Gottschling, a 53-year-old German who has chaired the risk committee since 2018 and charges an annual fee of $ 1 million, has been set on fire after the Swiss bank lost at least $ 4.7 billion to the collapse of the Archegos family office.
This came shortly after Credit Suisse had to suspend $ 10 billion in supply chain funding linked to the controversial financial Lex Greensill, whose insolvency could cost the lender’s customers up to $ 3 billion. . The bank has been forced to do so raise $ 1.9 billion to consolidate its capital and has canceled payments from investors.
David Herro, vice president of Harris Associates, who says he owns 10.25 percent of the shares, said: “The director’s job is to represent shareholders and oversee management … Mr. Gottschling doesn’t just have to to be rejected, but it amazes me in the light of the present that he has not yet given up. “
Herro added that he was waiting arrival of a new chair – the former CEO of Lloyds Bank, António Horta-Osório – on April 30 a board review with more recruited banking experience.
Harris will join the Ethos Foundation, which represents 200 Swiss pension funds that own between 3 and 5% of the lender.
“Our customers are very angry about what has happened,” said Vincent Kaufmann, CEO of Ethos. “Other members of the risk committee have not been there for a long time, so we will give them more opportunities. [Gottschling] he took office in 2018 as president. That now requires a change. “
Norway’s oil fund as well he said on Sunday would vote against Gottschling’s re-election, as well as five other board members, including chief independent director Severin Schwan. The world’s largest sovereign wealth fund owned 3.43% of the stock at the end of last year, according to the most recent disclosure.
Credit Suisse and Gottschling declined to comment.
Last week, the influential proxy advisor Glass Lewis advised shareholders will vote against Gottschling. He said the Greensill and Archegos scandals “call into question the effectiveness of the board’s oversight over the company’s control and risk framework… Gottschling has the ultimate responsibility.”
However, his partner representing ISS did not advise investors to oppose the board member.
Even with Norges ’support, it’s unclear whether Harris and Ethos can get enough support to fire Gottschling. Last year, Herro led a public campaign supported by Ethos and hedge funds Silchester International Investors and Eminence Capital to remove Urs Rohner’s presidency and keep former chief executive Tidjane Thiam in office.
He failed. Thiam left office, was re-elected president and continued until the end of his term. Rohner he said then that other major shareholders, including BlackRock, had given him more support and that investor discomfort “wasn’t something that worried me much.”
Gottschling began his career as a quantitative analyst at Deutsche Bank and has also worked for McKinsey and as a risk manager at Erste Bank. He is also the director of Deutsche Börse.
As a director, he participated in several conferences on the risks presented by Greensill last year. FT’s stories were caused in part by SoftBank using Credit Suisse’s supply chain financing funds to allocate hundreds of millions of dollars to troubled companies it owned.
Ultimately, Gottschling sided with those who thought Greensill was a valuable entrepreneurial client with whom it was worth continuing business, according to people with direct knowledge of the matter.
While SoftBank’s circular financing scheme was halted, Greensill-linked SCF funds subsequently grew to $ 10 billion. Gottschling was also a supporter of Lara Warner, former head of risk and compliance at Credit Suisse who was retired this month.
Another person close to the bank said Gottschling did not participate in calls about Greensill outside of the normal committee committee discussions and did not “personalize” him personally.
Greensill and Archegos are not the only failures in risk management during their tenure. In 2018, Credit Suisse lost about $ 60 million after it was left with a block of shares of clothing company Canada Goose when its shares fell. A year later, the bank lost $ 200 million when New York’s Malachite Capital hedge fund went bankrupt.
Additional reports by Richard Milne
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