Credit Suisse has come under increasing pressure to compensate Greensill customers

Credit Suisse is under increasing pressure from valued customers to offset losses following the collapse of supply chain financing funds associated with Greensill Capital.

Deciding whether or not to do so is one of the first major dilemmas the new António Horta-Osório chair faced in the bank clean-up, facing the threat of several collective actions by angry investors.

With more than 1,000 customers of Credit Suisse investing in the $ 10 billion set of funds, bank advisors and marketing materials told them they were low-risk products that are fully insured against losses.

However, the Swiss lender canceled the funds in March, and the invoices owed by Greensill’s clients were collected for investment products. Bank customers could face a loss of $ 3 billion after investing funds said many companies in debt were unable or unwilling to repay them.

UK serious fraud office on Friday he opened the investigation Sanjeev Gupta entered the metal empire, borrowing $ 1.2 billion through Credit Suisse funds linked to Greensill. Last month the Financial Times newspaper published a series suspicious invoices Related to Gupta companies.

Invested in the funds include the former Prime Minister of Qatar, hundreds of credit Suisse ultra-rich clients in Europe and Asia, pension funds and listed companies.

Investors have told FT that access to securities funds that have not yet been issued with invoices contradicts the fund’s rules and marketing material.

However, the bank’s lawyers are confident that the wording of the fund’s documents could mention the possibility of investing in unpaid receivables, according to people who have reported internal disputes.

“They still don’t clean me up,” he acknowledged, adding that customers should be compensated, personally investing in funds, and a wealthy person who runs the company, which is Credit Suisse’s main counterpart. “The facts are pretty clear, no future bills.”

Horta-Osório added that he hoped he would decide to compensate the customer, in a repeat of the decision taken when Lloyds Bank Group CEO misapplied payment protection insurance to customers.

“Of course, it’s affecting my relationship with the bank,” the investor told FT. “Credit Swiss client advisers tell me ‘it’s not my fault’; they agree that senior management should act differently to try to maintain the relationship, but it’s been fatal.”

According to Bloomberg, former Qatari Prime Minister Hamad bin Jassim Al Thani Sheikh has invested $ 200 million in Credit Suisse funds. When Hamad Sheikh was head of the Qatari Investment Authority, the sovereign wealth fund rescued Credit Suisse in the financial crisis, and some of the bank’s winning clients live in the Gulf state. A representative of Hamad Sheikh could not be commented on.

Credit Suisse has declined to confirm whether the fund members will suffer a loss, but said it was a professional investor who was previously aware of the risks.

CEO Thomas Gottstein he said in March, the scandal “of course, the first problem is the problem for investors in the supply chain funds,” rather than the bank itself.

The mishap has also caught up with Credit Suisse, a major investor company.

Swiss diagnostic company Quotient, which does coronavirus testing kits, Invested $ 110 million in supply chain funds, but a regulatory dossier “Such losses should be paid for by Credit Suisse and not by companies or other investor funds.” Credit Suisse is a major shareholder in the Asset Management Quotient and holds a 6 percent stake.

Nam Tai Property, a US-listed Chinese company, invested $ 150 million in funds after raising $ 170 million from a private emergency location last October, sent a request to Credit Suisse and filed complaints with the Hong Kong Securities and Futures Commission. Hong Kong Monetary Authority.

The top officials are responsible for compensating customers for fear that they could weaken the bank’s hands in potential legal proceedings against Greensill, according to people familiar with the matter.

They are also concerned that Finma, the Swiss financial regulator, will take the decision to return professional investors as a precedent and force the bank to raise more capital as a result.

Pressure is mounting as lawsuits are being filed in London and Zurich, including Boies Schiller Flexner and Quinn Emanuel, two banks previously involved in legal proceedings against the bank. .

Credit Suisse declined to comment.