By John Revill
ZURICH (Reuters) -Credit Suisse was ordered to pay $926 million to Georgia’s former prime minister on Friday for shedding a part of his fortune, in a Singapore court docket ruling that represents one of many largest authorized awards made in opposition to the financial institution.
Singapore’s International Commercial Court mentioned a unit of Credit Suisse had not acted in good religion and uncared for to maintain the belongings of Bidzina Ivanishvili secure, within the newest blow to the troubled financial institution, which is being taken over by UBS.
Credit Suisse instantly mentioned it could attraction the choice.
Billionaire businessman Ivanishvili, who was Georgia’s prime minister in 2012 to 2013, had positioned $1.1 billion below the custodianship of Credit Suisse Trust in 2005, the court docket heard.
Ivanishvili’s attorneys Cavinder Bull and Woo Shu Yan from the legislation agency Drew & Napier mentioned Credit Suisse Trust’s failings had led to fraudulent mismanagement and substantial losses.
In its judgment revealed on Friday, the court docket mentioned the financial institution had didn’t safeguard Ivanishvili’s belongings by stopping Patrice Lescaudron, an adviser at Credit Suisse Trust in Singapore, gaining access to them.
Lescaudron was convicted by a Swiss court docket in 2018 of forging signatures of former purchasers, together with Ivanishvili, over an eight yr interval. He admitted falsifying trades and hiding losses in a scheme that made him tens of thousands and thousands of Swiss francs. He was launched in 2019 and killed himself in 2020.
“It is not accepted that the defendant’s conduct was reasonable,” Judge Patricia Bergin mentioned in a written judgment.
“It preferred the importance of Mr Lescaudron in retaining the big client, the plaintiff, with the Credit Suisse organisation to the compliance with its core obligation of keeping the Trust assets safe.”
Credit Suisse knew Lescaudron had breached rules designed to stop fraud and had waited for as much as two years for a response from him when questioned, Bergin mentioned.
“Its tolerance of these flagrant breaches was not in good faith and was unreasonable,” Bergin added.
The $926 million to be paid by Credit Suisse shall be diminished by $79 million it had already paid in December.
“The judgment published today is wrong and poses very significant legal issues,” Credit Suisse mentioned in a press release. “Credit Suisse Trust Limited intends to vigorously pursue an appeal,” it added.
The financial institution can also be interesting in opposition to one other judgment associated to its administration of Ivanishvili’s belongings.
A Bermuda court docket dominated in March 2022 that Ivanishvili and his household are due damages of round $600 million from Credit Suisse’s native life insurance coverage arm.
The last sum due from Credit Suisse must be additional diminished to stop an overlap with the Bermuda case and forestall a so-called double restoration, the court docket mentioned. Credit Suisse is at the moment interesting the Bermuda determination.
An individual acquainted with the matter mentioned the overlap is estimated to be about $300 million and that Credit Suisse has already taken provisions for a part of the full compensation.
In the Singapore case, the financial institution will attraction on the premise that the compensation associated to cash misplaced as a consequence of dangerous funding selections quite than simply fraud.
A spokesman for Ivanishvili welcomed the Singapore determination.
“Despite the judgment in Bermuda last year and the admission of breach of duty during the Singapore trial, Credit Suisse has continued to frustrate our clients’ efforts to seek redress for the crimes committed by its employees,” the spokesperson mentioned.
“We expect Credit Suisse to fully comply with the judgment and finally accept responsibility for its failures.”
(Editing by Alexander Smith)
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