Credit Suisse Execs Urged To Resign Over Tax Charges

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Credit Suisse Execs Urged To Resign Over Tax Charges
By Credit Suisse Group AG (Own work) [<a href="http://creativecommons.org/licenses/by-sa/3.0">CC BY-SA 3.0</a>], <a href="https://commons.wikimedia.org/wiki/File%3ACredit_Suisse_Logo.svg">via Wikimedia Commons</a>

Christian Levrat, head of the Swiss Social Democrats, urged the Swiss lender’s top execs to resign amid mounting political pressure over Credit Suisse Group AG (ADR) (NYSE:CS)’s long-running tax spat with the U.S. According to a report appearing in the Financial Times, the senior Swiss politician reportedly said the execs are liability for the bank.

Credit Suisse’s tax woes

In March of this year, through a letter and a series of hearings, the U.S. Senate put pressure on the Justice Department to extradite Swiss bankers accused of helping Americans evade taxes, and to generally ramp up their efforts to prosecute banks like Credit Suisse Group AG (ADR) (NYSE:CS). A U.S. investigation into Credit Suisse Group AG (ADR) (NYSE:CS) has found that as of 2006, the bank had 22,000 U.S. customers with assets of more than $12 billion at the peak. Canton Zurich records show that Credit Suisse formed a subsidiary company, CS International Advisors AG, in December 2013, into which it then moved all of its U.S. cross-border business. Analysts say this move could have been made to diffuse the fallout from a guilty plea and fine. Last week it was reported that the Swiss lender is expected to reach a settlement with the United States Justice Department soon, pleading guilty to criminal charges for aiding tax evaders and paying a significant fine. But many elements of the proceedings remain unclear. Last month, the lender was reportedly forced to turn over certain documents and hard drives in connection with tax evasion allegations.

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Mounting political pressure

During last week’s AGM, the CS chairman Urs Rohner stressed that the bank was “doing everything” it could to bring matters to a close, though he didn’t spell out how exactly the final resolution might be constituted. He also rejected a call from one shareholder that the lender’s chief executive Brady Dougan should resign. Interestingly, in the backdrop of Credit Suisse Group AG (ADR) (NYSE:CS) making efforts to resolve the tax dispute, the senior Swiss politician Christian Levrat has called for the lender’s chief executive and chairman to step down. Levrat’s criticism echoed across the political spectrum with Christophe Darbellay, head of the centre-right CVP, demanding Switzerland should consider allowing Credit Suisse Group AG (ADR) (NYSE:CS) to fail, if necessary. The head of the conservative BDP, Martin Landolt, also told the Sonntags-Zeitung newspaper that there should be no state aid for the lender without “a new beginning” at the bank.

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