ZURICH, Could 26 (Reuters) – Credit score Suisse (CSGN.S) was ordered to pay $926 million to Georgia’s former prime minister on Friday for dropping a part of his fortune, in a Singapore courtroom ruling that represents one of many greatest authorized awards made in opposition to the financial institution.
Singapore’s Worldwide Industrial Court docket mentioned a unit of Credit score Suisse had not acted in good religion and uncared for to maintain the property of Bidzina Ivanishvili secure, within the newest blow to the troubled financial institution, which is being taken over by UBS (UBSG.S).
Credit score Suisse instantly mentioned it will enchantment the choice.
Billionaire businessman Ivanishvili, who was Georgia’s prime minister in 2012 to 2013, had positioned $1.1 billion beneath the custodianship of Credit score Suisse Belief in 2005, the courtroom heard.
Ivanishvili’s attorneys Cavinder Bull and Woo Shu Yan from the regulation agency Drew & Napier mentioned Credit score Suisse Belief’s failings had led to fraudulent mismanagement and substantial losses.
In its judgment printed on Friday, the courtroom mentioned the financial institution had didn’t safeguard Ivanishvili’s property by stopping Patrice Lescaudron, an adviser at Credit score Suisse Belief in Singapore, gaining access to them.
Lescaudron was convicted by a Swiss courtroom in 2018 of forging signatures of former shoppers, together with Ivanishvili, over an eight 12 months interval. He admitted falsifying trades and hiding losses in a scheme that made him tens of hundreds of thousands of Swiss francs. He was launched in 2019 and killed himself in 2020.
“It’s not accepted that the defendant’s conduct was cheap,” Choose Patricia Bergin mentioned in a written judgment.
“It most popular the significance of Mr Lescaudron in retaining the massive shopper, the plaintiff, with the Credit score Suisse organisation to the compliance with its core obligation of protecting the Belief property secure.”
Credit score Suisse knew Lescaudron had breached rules designed to forestall fraud and had waited for as much as two years for a response from him when questioned, Bergin mentioned.
“Its tolerance of those flagrant breaches was not in good religion and was unreasonable,” Bergin added.
[1/2] Georgia’s former Prime Minister Bidzina Ivanishvili attends a information convention in Tbilisi, Georgia, June 14, 2016. REUTERS/David Mdzinarishvili
APPEAL
The $926 million to be paid by Credit score Suisse will likely be decreased by $79 million it had already paid in December.
“The judgment printed as we speak is mistaken and poses very vital authorized points,” Credit score Suisse mentioned in an announcement. “Credit score Suisse Belief Restricted intends to vigorously pursue an enchantment,” it added.
The financial institution can also be interesting in opposition to one other judgment associated to its administration of Ivanishvili’s property.
A Bermuda courtroom dominated in March 2022 that Ivanishvili and his household are due damages of round $600 million from Credit score Suisse’s native life insurance coverage arm.
The ultimate sum due from Credit score Suisse ought to be additional decreased to forestall an overlap with the Bermuda case and stop a so-called double restoration, the courtroom mentioned. Credit score Suisse is presently interesting the Bermuda determination.
An individual acquainted with the matter mentioned the overlap is estimated to be about $300 million and that Credit score Suisse has already taken provisions for a part of the full compensation.
Within the Singapore case, the financial institution will enchantment on the idea that the compensation associated to cash misplaced attributable to unhealthy funding choices somewhat than simply fraud.
A spokesman for Ivanishvili welcomed the Singapore determination.
“Regardless of the judgment in Bermuda final 12 months and the admission of breach of responsibility in the course of the Singapore trial, Credit score Suisse has continued to frustrate our shoppers’ efforts to hunt redress for the crimes dedicated by its staff,” the spokesperson mentioned.
“We anticipate Credit score Suisse to completely adjust to the judgment and eventually settle for accountability for its failures.”
Modifying by Alexander Smith
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