Credit Suisse delays publishing Greensill failings report a week after police raid
Credit Suisse has pushed back on publishing a report that details its own failings around the collapse of $10bn of investment funds it ran with Greensill Capital, a week after Swiss police raided its headquarters for related documents.
Findings from the probe, which was carried out by Deloitte and Swiss law firm Walder Wyss, had been due for release alongside the bank’s third-quarter results next month.
But their release will now be delayed, amid concerns it would harm the bank’s attempts to negotiate the return of billions of dollars of investor money following the collapse of Greensill and make insurance claims on losses, according to a person familiar with the matter.
It comes after the stakes were raised last week for Credit Suisse as Swiss police raided its offices and seized documents relating to the failure of the bank’s $10bn range of supply chain finance (SCF) funds that were linked to Softbank-backed Greensill.
Although Credit Suisse told City PM that the investigation by Zurich’s public prosecutor’s office is not directed at the bank, or current or former employees, insiders fear that the probe may be expanded further down the line, according to the Financial Times, who first reported on the delay.
The raid last week followed a criminal complaint from the Swiss government’s economic affairs secretariat (SECO), and centres around the way that Credit Suisse managed and marketed its funds that financed Greensill’s controversial lending schemes.
SECO had filed a criminal complaint in relation to collapsed financier Greensill Capital for alleged violations of the law against unfair competition.
It filed its complaint against “persons unknown”, which gives the prosecutor’s investigation the potential to be extended at any point to individuals and companies that are yet to be named.
It comes after Credit Suisse’s asset management division suspended a $10bn range of funds in March that were linked to Softbank-backed Greensill, which collapsed into administration amid allegations of fraud and a lobbying scandal involving ex-prime minister David Cameron.
Although the Swiss lender has collected around $7bn of the fund’s assets so far, it has previously estimated that around $2.3bn remains at risk – and it is this money that could be made even more difficult to collect if the findings are released, according to the person familiar with the matter.
On top of this, Credit Suisse is also facing the prospect of civil lawsuits from investors in the collapsed SCF funds.
Investors in the funds were led to believe that its popular SCF funds were among the lowest risk investments it offered, as the loans they held were fully insured against losses and backed by invoices that were usually paid in a few weeks.
But as the funds swelled to $10bn, a substantial amount of the money was then lent through Greensill and against invoices for future sales had not taken place but were just predicted