ZURICH: Credit Suisse Group AG exonerated CEO Tidjane Thiam as one of his key allies took the fall for a corporate spying scandal that shook Zurich’s financial elite and tainted the bank’s reputation.
Chief operating officer Pierre-Olivier Bouee, the CEO’s chief lieutenant at three companies for more than 10 years, stepped down after ordering detectives to shadow former wealth-management head Iqbal Khan to ensure he didn’t poach clients and brokers for his new post at UBS Group AG. The bank said that he acted alone, informing neither Thiam nor the board of his intentions.
While chairman Urs Rohner said that Thiam still enjoys the backing of the bank’s board, the scandal risks isolating the CEO after he allowed a personal dispute to escalate into a scandal that damaged the reputation of Credit Suisse and Swiss banking. Rohner personally negotiated Iqbal’s exit and took control of the investigation, while Thiam has lost a trusted ally.
Events took on an even more dramatic turn just before the bank’s announcement, when it emerged that a contractor hired to recruit the investigative agency took his own life. The man – known only as T – died last Tuesday, according to Thomas Fingerhurth, a lawyer for detective agency Investigo. Zurich prosecutors and police are now conducting further investigations to “clarify the circumstances surrounding the death”.
The bank said its investigation also didn’t find any evidence that Iqbal had attempted to poach employees. Homburger, the law firm charged with investigating the case, didn’t look into the private falling out of Thiam and Iqbal and said some correspondence had been deleted.
Rohner struck a contrite tone at a press conference in Zurich yesterday, apologising to Iqbal and his family, the bank’s own employees and expressing “regret” at the contractor’s death. At the same time, he deflected questions as to whether he should take any personal responsibility for an action that Credit Suisse said was “wrong and disproportional and has resulted in severe reputational damage to the bank”.
“While it is understandable that companies hire third parties to monitor employees, especially when acting in a highly competitive market and there has been a breakdown in the relationship, it is unacceptable to infringe on the private lives of individuals, ” said Bambos Tsiattalou, a criminal defence lawyer at Stokoe Partnership.
“Those with knowledge of activities of this nature should be held accountable for any wrongdoing exposed.”
Bouee’s resignation sees Thiam lose a close confidant whose career has closely followed that of his own. They both moved to Prudential Plc in 2008 from Aviva Plc, where they worked together for about four years. Bouee started his career in the French Treasury before he moved to McKinsey & Co in 2000, where Thiam also worked.
“The COO said that he alone, in order to protect the interests of the bank, decided to initiate the observation of Iqbal Khan, ” the bank said. — Bloomberg