GENEVA, April 2 (Reuters) – Switzerland’s Federal Prosecutor has opened an investigation into the state-backed takeover of Credit score Suisse (CSGN.S) by UBS Group (UBSG.S), the workplace of the lawyer common stated on Sunday.
The prosecutor, based mostly within the Swiss capital Bern, is trying into potential breaches of the nation’s legal legislation by authorities officers, regulators and executives on the two banks, which agreed on an emergency merger final month to keep away from a meltdown within the nation’s monetary system.
There have been “quite a few points of occasions round Credit score Suisse” that warranted investigation and which wanted to be analysed to “determine any legal offences that would fall inside the competence of the [prosecutor]”, it stated in a press release.
“The Workplace of the Legal professional Basic needs to proactively fulfil its mandate and accountability to contribute to a clear Swiss monetary centre and has arrange a monitoring system in order that it will possibly take motion instantly on any points that fall inside its space of accountability,” it added.
It gave no indication of any particular points of the merger settlement it would look into or how lengthy the investigation would possibly final.
Each UBS and Credit score Suisse declined to remark.
OUT OF THE ORDINARY
“It is astonishing that the prosecutor would remark,” stated Mark Pieth, professor emeritus of the College of Basel, the place he has taught legal legislation and criminology. However the rescue “is so out of the atypical that they needed to say one thing.”
Pieth stated the prosecutor might be probing breaches of secrecy provisions by officers, or the buying and selling on inside info, including that the wiping out of some bondholders as deliberate below the deal can be problematic.
Within the deal introduced on March 19 and orchestrated by the Swiss authorities, the central financial institution and market regulator, UBS would purchase rival Credit score Suisse for 3 billion Swiss francs ($3.3 billion). The financial institution is making an attempt to shut the deal by as quickly as the tip of April, sources have advised Reuters.
The Swiss public and politicians have voiced issues concerning the degree of state assist, with almost 260 billion Swiss francs in liquidity and ensures provided by the federal government and Swiss Nationwide Financial institution.
A ballot of Swiss economists discovered that just about half suppose the takeover of Credit score Suisse was not the perfect resolution, and warned that the state of affairs had dented Switzerland’s status as a banking centre.
The takeover, which was additionally designed to assist safe monetary stability globally throughout a interval of turmoil, has sparked concern amongst critics concerning the dimension of the merged financial institution, with $1.6 trillion in property and greater than 120,000 workers worldwide.
As much as 30% of workers may lose their jobs as a result of takeover, based on an unnamed senior UBS supervisor quoted in Swiss media.
($1 = 0.9148 Swiss francs)
Reporting by Sneha Bhowmik in Bengaluru, Gabrielle Tétrault-Farber in Geneva and Elisa Martinuzzi in London; Modifying by David Goodman and David Holmes
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