Advertisement

Spy scandal at Credit Suisse

A farce worthy of a James Bond film has rocked Credit Suisse, Switzerland’s second-largest bank. Clients and shareholders are appalled.

Credit Suisse Zurich
The bank's reputation has suffered a major blow

A farce worthy of a James Bond film has rocked Switzerland's second-largest bank. Clients and shareholders are appalled. Alex Rankine reports.

If you want to have a great career, then don't "buy a house next door to your boss", says Philippe Escande in Le Monde. A banal dispute between neighbours about trees has snowballed into an espionage scandal that has rocked the usually staid Swiss banking world.

Advertisement - Article continues below

The trouble began when Iqbal Khan, head of wealth management at Credit Suisse, moved in next door to chief executive Tidjane Thiam in the upmarket village of Herrliberg on the shores of Lake Zurich. Thiam's strategy has centred on growing the bank's wealth-management arm. That initially made for warm relations with Khan, who increased profits at the division by roughly 80%, notes Stephen Morris in the Financial Times. Thiam dubbed Khan a "star" and repeatedly promoted him. Yet things changed after Khan "bought, knocked down and redeveloped the house immediately next to his boss". That meant two years of noisy construction work, including weekends.

The neighbourly dispute created a "toxic" workplace environment. Hoping for a rapprochement, in January Thiam invited Khan and his wife to a cocktail party, say Rupert Neate and Julia Kollewe in The Guardian. Yet the peace offering quickly turned sour. The pair "reportedly had a heated argument about a row of trees Thiam had planted on his property that partially blocked Khan's view of the lake". With the duo barely on speaking terms, Khan decided to jump ship for rival UBS. But then the affair took an extraordinary "James Bond-style turn".

The banker who knew too much

The whole incident is a huge embarrassment for a firm whose "wealthy account holders" expect "discretion and confidentiality", notes Elisa Martinuzzi for Bloomberg. It also raises serious questions about how the bank is run. Why was someone in Boue's position able to authorise such a high-risk operation without clueing in top management? Shares in Credit Suisse are down by almost 50% since Thiam took over. Revelations about the "dark side of global finance" will not help the bank's efforts to dig itself out of that hole.

Advertisement
Advertisement

Recommended

The British equity market is shrinking
Stockmarkets

The British equity market is shrinking

British startups are abandoning public stockmarkets and turning to deep-pocketed Silicon Valley venture capitalists for their investment needs.
8 Nov 2019
Listed companies are dying out, and that could have serious consequences
Stockmarkets

Listed companies are dying out, and that could have serious consequences

Private equity is taking over from public stockmarkets as the biggest provider of capital to companies. That’s bad for investors and bad for society a…
3 Aug 2020
The revolutionary potential of 5G
Sponsored

The revolutionary potential of 5G

SPONSORED CONTENT – With the right investment and support, the next generation of connectivity could transform society
3 Aug 2020
Reasons for investors to be cheerful
Investment strategy

Reasons for investors to be cheerful

Markets are betting on a V-shaped recovery – and recent data suggests that they may be right.
3 Aug 2020

Most Popular

Gold bugs' dreams are coming true – but we could still see a V-shaped recovery
Gold

Gold bugs' dreams are coming true – but we could still see a V-shaped recovery

John and Merryn talk about how it's perfectly reasonable to expect a V-shaped recovery and to continue holding gold as well. Plus, inflation, staycati…
30 Jul 2020
UK banks have had a shocking week – so it’s probably a good time to buy
UK stockmarkets

UK banks have had a shocking week – so it’s probably a good time to buy

Lloyds Bank reported a £676m loss this week. And, with all of the UK's high street banks having a terrible time of things, bank stocks are detested ri…
31 Jul 2020
The charts that matter: gold finally sets a new record high 
Global Economy

The charts that matter: gold finally sets a new record high 

As gold surges past its previous high, John Stepek looks at how it's affected the charts that matter most to the global economy.
1 Aug 2020