{"id":16620,"date":"2025-06-13T06:11:29","date_gmt":"2025-06-13T06:11:29","guid":{"rendered":"https:\/\/finderica.com\/?p=16620"},"modified":"2025-06-13T06:11:29","modified_gmt":"2025-06-13T06:11:29","slug":"the-secret-credit-suisse-files-on-greensill-capital","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=16620","title":{"rendered":"the secret Credit Suisse files on Greensill Capital"},"content":{"rendered":"
\n

Credit Suisse may be gone but it is far from forgotten. London\u2019s High Court is the latest venue to unearth failings at the venerable Swiss bank before its emergency takeover in 2023 by arch-rival UBS.<\/p>\n

London\u2019s Rolls Building is where a $440mn legal battle is being waged between a Credit Suisse investment fund, SoftBank, and a subsidiary of Greensill Capital, the group founded by Australian financier Lex Greensill. The fund brought the lawsuit in an attempt to recover hundreds of millions of dollars that it says investors lost following the 2021 collapse of Greensill, which was in turn backed by SoftBank. <\/p>\n

Greensill\u2019s implosion caused Credit Suisse to suspend and close $10bn worth of funds that had lent money via the supply-chain finance business, trapping the savings of more than 1,000 of the Swiss bank\u2019s most prized clients.<\/p>\n

Mr Justice Miles, the judge presiding over the four-week trial, ordered the release on Wednesday of a report prepared for Swiss regulator Finma by an external law firm. He also ordered the release of a copy of Finma\u2019s subsequent ruling on Credit Suisse\u2019s relationship with Greensill, after requests from the Financial Times and other media organisations. Excerpts of the 500-page files have been presented as evidence in the trial.<\/p>\n

The previously confidential Finma files reveal new information over the nature of Credit Suisse\u2019s relationship with Greensill, as well as the cultural failings UBS must contend with as it continues to integrate the two lenders. <\/p>\n

Here are the highlights.<\/p>\n

Secrets and lies<\/h3>\n

Credit Suisse\u2019s relationship with Lex Greensill caused \u201cimmense reputational damage\u201d to the now defunct bank, with its executives \u201cnaively\u201d relying on information they received from the Australian financier to defend the partnership, according to Switzerland\u2019s financial regulator. <\/p>\n

Finma said the bank failed to act on warnings it received about Greensill Capital and at times obstructed investigators during its probe. <\/p>\n

<\/source><\/source>\"Lex<\/picture>
Lex Greensill arrived at the Rolls Building earlier this week to give evidence in the $440mn trial<\/span> \u00a9 Chris J Ratcliffe\/Bloomberg<\/span><\/figcaption><\/figure>\n

The watchdog said that enquiries to Credit Suisse regarding allegations against metals magnate Sanjeev Gupta and Greensill were \u201csometimes answered incompletely, misleadingly or incorrectly\u201d by the bank. <\/p>\n

\u201cCritical questions were repeatedly met with resistance from the bank and its top management level, even when repeatedly asked by the regulator. This behaviour is difficult to understand,\u201d Finma added.<\/p>\n

The 2022 reports also show how Lex Greensill was able to \u201cplay off the different interests\u201d within Credit Suisse \u201cagainst each other\u201d, according to Finma. A spokesperson for Lex Greensill did not immediately respond to a request seeking comment.<\/p>\n

Since its state-sponsored takeover of Credit Suisse, UBS has been forced to handle the legacy issues of its former rival and has so far agreed to pay hundreds of millions of dollars to settle other legal cases. UBS says the Finma files deal with legacy Credit Suisse matters that predate the takeover.<\/p>\n

Anonymous tips<\/h3>\n

The Finma files reveal that Credit Suisse\u2019s management received several anonymous tips, warning them about Greensill Capital, on top of confronting a slew of \u201cnegative\u201d articles from the FT and others about the group.<\/p>\n

Greensill Capital claimed it used technology to revolutionise the staid niche of supply-chain finance, presenting its role as helping to address the problem of slow invoice payments. <\/p>\n

In a December 2022 enforcement ruling, Finma said anonymous tips to the bank\u2019s top management failed to prompt in-depth investigations. <\/p>\n

\u201cThis is despite the fact that the specific content and wording of the anonymous references would suggest that they should be taken seriously,\u201d Finma said. \u201cThe bank naively relied on information from Greensill.\u201d<\/p>\n

In one case, following an anonymous email that raised concerns about the bank\u2019s relationship with Greensill, Michel Degen, who led the bank\u2019s Swiss and Emea asset management unit, wrote to members of Credit Suisse\u2019s executive board. <\/p>\n

In the statement, Degen \u201cdescribed Greensill Capital as a successful and highly professional business partner that the bank had scrutinised in detail\u201d, according to Finma. \u201cHe took the text used here verbatim from a statement by Lex Greensill,\u201d the regulator added. <\/p>\n

A lawyer representing Degen told the FT on Thursday that a statement from Greensill was added to the end\u00a0of\u00a0the\u00a0email.<\/p>\n

\u201cIf you are saying that Mr. Degen restated what Lex Greensill said, you are misreading the report,\u201d Degen\u2019s lawyer added.<\/p>\n

Credit Suisse fired 11 employees who it deemed \u201cjointly responsible\u201d for the bank\u2019s failing over Greensill, according to the files.<\/p>\n

<\/source><\/source>\"The<\/picture>
Greensill Capital collapsed in 2021, causing Credit Suisse to suspend and close $10bn worth of funds<\/span> \u00a9 Anthony Devlin\/Bloomberg<\/span><\/figcaption><\/figure>\n

\u2018Negligent or worse\u2019<\/h3>\n

The Finma reports shed more light on the fallout from an FT article that in 2020 revealed that Greensill\u2019s backer SoftBank had invested in the Credit Suisse funds, which were also lending substantial amounts to other companies backed by the Japanese technology group.<\/p>\n

The bank initially issued a statement claiming that the recent media reports contained \u201cinaccurate and misleading statements\u201d. However, after an internal investigation, Credit Suisse discovered that executives had signed a so-called \u201cside letter\u201d with SoftBank that breached the rules of the funds.<\/p>\n

The chair of Credit Suisse\u2019s audit committee stated in an email about the investigation\u2019s findings: \u201cThe behaviour of the executives is, I am sorry to say that, either negligent or worse.\u201d<\/p>\n

Credit Suisse reprimanded two employees over the side letter, handing them a \u201cfinal warning\u201d. Details of this reprimand included in the Finma files show that a \u201cmisleading\u201d statement had been communicated to the regulator about the funds.<\/p>\n

Corporate spies sent in<\/h3>\n

The reports also show Credit Suisse executives tried unsuccessfully to push Greensill to reduce funding to Gupta\u2019s GFG Alliance, exposure to which caused major losses for the bank\u2019s clients after Greensill\u2019s collapse.<\/p>\n

According to Finma\u2019s ruling, Credit Suisse hired a private investigations firm, Diligence, to produce a report on GFG in 2018, due to growing concerns about the liquidity of the group. <\/p>\n

This was a year before a spying scandal hit the bank, which would eventually precipitate the exit of Credit Suisse\u2019s chief executive, Tidjane Thiam. The bank had separately ordered private investigators at Investigo to spy on its head of wealth management, Iqbal Khan, after he resigned to move to UBS. <\/p>\n

<\/source><\/source>\"Credit<\/picture>
Credit Suisse collapsed in March 2023 and was taken over by arch-rival UBS<\/span> \u00a9 Fabrice Coffrini\/AFP\/Getty Images<\/span><\/figcaption><\/figure>\n

The investigators\u2019 GFG report raised several red flags around Gupta\u2019s businesses, including allegations around undisclosed related party transactions and their suspected participation in a \u201ccarousel fraud\u201d, according to Finma\u2019s ruling.<\/p>\n

GFG later came under investigation from the UK\u2019s Serious Fraud Office, but has denied wrongdoing. GFG declined to comment.<\/p>\n

Plans to reduce the funds\u2019 exposure to Gupta\u2019s companies were discussed as early as December 2018, the same month the bank\u2019s head of compliance shared the findings from the private investigators\u2019 report with colleagues.<\/p>\n

Lex Greensill made a series of pledges to reduce the Gupta exposure, telling Credit Suisse executives: \u201cYou have it in blood from me. No ifs and no buts. I am personally committing to these\u201d. However, Finma found that the Australian also \u201cput pressure on the portfolio management to buy bonds that actually increased the exposure\u201d.<\/p>\n

Employees frequently expressed alarm at the continued high exposure of the funds to Gupta\u2019s businesses, with one senior executive emailing a colleague: \u201cWhy is GFG back at 1bn!!!!!\u201d<\/p>\n

\u2018I don\u2019t know if I find that very reassuring\u2019<\/h3>\n

The Finma files also shed light on the bank\u2019s attempts to get to grips with Greensill\u2019s practice of financing so-called \u201cfuture receivables\u201d, a term for hypothetical future invoices on trades that had yet to be agreed.<\/p>\n

Finma found that Credit Suisse \u201cwas not in a position to distinguish between and monitor future and actual receivables\u201d, while references to the term did not appear in the fund\u2019s documents or marketing materials.<\/p>\n

One employee who asked a senior colleague about the practice of financing future receivables was told in April 2020 that it was \u201call fine\u201d as the issue had been discussed with Lex Greensill. The employee responded: \u201cHmmm. I don\u2019t know if I find that very reassuring right now\u201d.<\/p>\n

Greensill collapsed less than a year later, in March 2021. Two years after that, Credit Suisse would follow it.<\/p>\n<\/div>\n

Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Credit Suisse may be gone but it is far from forgotten. London\u2019s High Court is the latest venue to unearth failings at the venerable Swiss bank before its emergency takeover in 2023 by arch-rival UBS. London\u2019s Rolls Building is where a $440mn legal battle is being waged between a Credit Suisse investment fund, SoftBank, and<\/p>\n","protected":false},"author":2,"featured_media":16621,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"categories":[206],"tags":[1118,238,1672,6765,2445,6022],"class_list":{"0":"post-16620","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-financial-crime","8":"tag-capital","9":"tag-credit","10":"tag-files","11":"tag-greensill","12":"tag-secret","13":"tag-suisse"},"_links":{"self":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/16620","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=16620"}],"version-history":[{"count":0,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/16620\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/media\/16621"}],"wp:attachment":[{"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=16620"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=16620"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=16620"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}