Credit Suisse spying scandal started with fight at a party
ZURICH: Tidjane Thiam had reason to celebrate. A grinding threeyear turnaround at Credit Suisse Group AG was starting to pay off and the bank’s boss was hosting a new year’s drinks party.
Among his 60 or so guests were many locals from the Zurich suburb of Herrliberg, along with a clutch of top Credit Suisse executives and his new neighbours— Iqbal Khan, the bank’s wealthmanagement chief, and his wife.
Before long, it all went wrong. A remark by Khan to Thiam’s partner set off a bitter feud between the two alpha males. The guest had insulted the state of the garden, according to a person who was there.
Later, Thiam tapped Khan on the shoulder and asked for a word. The two went downstairs and argued before later resurfacing. The dispute has reverberated ever since and reached a climax on Tuesday. That’s when Khan started his new post at UBS Group AG, Credit Suisse’s bigger rival in Zurich, and Thiam’s board revealed the results of an extraordinary internal investigation into the embarrassing soap opera and the decision to spy on Khan after he quit July 1. The result: Thiam’s long-time top lieutenant lost his job, as did the bank’s head of security, and an unidentified consultant took his own life.
As the dust clears, the next act of the drama is set to begin. The focus could turn to Thiam’s future now that a potential successor is gone. Chairman Urs Rohner’s term ends in 2021.
“It would make sense for the board to start looking at succession now,” Urs Beck, a fund manager at EFG Asset Management in Zurich and Credit Suisse shareholder, said in a phone interview. “It wouldn’t be absurd for Thiam to become chairman.”
Before that happens, though, Thiam has some work to do to put the house back in order. His damage control began hours after a board reprimand and Rohner’s apology to employees, clients and shareholders.
The events are “deeply regrettable,” Thiam wrote in an internal memo. “The surveillance of Iqbal Khan was strictly an isolated event and full accountability has been taken by the individuals concerned,” Thiam’s memo said. “Difficult questions about culture and ethical standards have been raised. The board moved swiftly to address these.”