Anger At Credit Suisse's Closing Stockholder Meeting

Credit Suisse, one of Switzerland's oldest and most prestigious banks, will hold its final annual general meeting on Tuesday. The bank was rescued last month by Swiss rival UBS through a hastily-arranged takeover for which Switzerland invoked emergency legislation. The takeover bypassed Credit Suisse shareholders, who would have otherwise had a say, and largely wiped out the value of their holdings.

A Troubled History

The gathering signals the dishonorable demise of the 167-year-old main bank established by Alfred Escher, a well-known King Alfred I of Switzerland who helped construct the nation's railroads before founding Credit Suisse. Years of controversies and losses have marred the reputation of Credit Suisse. Before being sent into a tailspin by a jolt brought on by the failure of Silicon Valley Bank in the US, the bank had been making efforts to reorganize and move past the past.

A Shotgun Merger

Before UBS raced to the rescue with a shotgun merger planned and financed by the Swiss government, Credit Suisse was on the verge of bankruptcy. Since the announcement of the acquisition, Chairman Axel Lehmann and CEO Ulrich Koerner have not formally addressed stockholders.

Norway's Sovereign Wealth Fund abstains from voting for directors to be re-elected

One of the biggest financial institutions in the world, Norway's national wealth fund, announced that it would refuse to cast a vote to re-elect Lehmann and six other members in a show of public disfavor. The bank's management had earlier come under fire from Institutional Shareholder Services (ISS), a U.S. vote advisor, for “lack of oversight and poor stewardship.”

Withdrawn Proposals from the Meeting's Agenda

Credit Suisse removed a few items from the meeting's schedule prior to Tuesday, including the dismissal of management, which is usually a barometer of trust. Additionally, it abandoned ideas for a unique incentive associated with the bank's transition strategy.

The Value of Shares and AT1 Debt

In addition to devaluing Credit Suisse's stock by billions of Swiss francs, the near-collapse totally eliminated $17 billion in Additional Tier 1 (AT1) debt. Quinn Emanuel Urquhart & Sullivan has been retained by a collection of AT1 owners to pursue legal action for recompense.

Investigation into the Credit Suisse Takeover

In the meantime, the attorney general's office announced on Sunday that the Federal Prosecutor of Switzerland has launched an inquiry into the acquisition of Credit Suisse. The prosecution is investigating alleged illegal violations of Swiss law by government representatives, inspectors, and leaders of the two institutions.

Conclusion

Many investors and bank clients are concerned about the situation at Credit Suisse. A new chapter in the history of the bank and its interaction with stockholders will be sealed by the conclusion of the annual general meeting. It is unclear how Credit Suisse will proceed in the upcoming months and years as inquiries go on.

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