Credit Suisse unit faces huge payout to tycoon

A Credit Suisse unit has been ordered to pay billionaire Bidzina Ivanishvili what is set be hundreds of millions of dollars by a Singapore court in yet another blow for the bank in the long-running legal saga.

The court put damages at $926m, minus deductions for an earlier settlement.

The amount will be further revised down “to ensure there is no double recovery” after a Bermuda court awarded Ivanishvili more than $600m in damages in that case last year.

Singapore-based Credit Suisse Trust breached its duty to the plaintiffs in failing to safeguard the trust assets, according to a judgment published Friday.

The ruling marks another major setback for Credit Suisse after the loss to Ivanishvili in the Bermuda court, a conviction for money laundering in Switzerland and a raft of other scandals that undermined investor confidence in the bank. It had to accept a government-brokered takeover by UBS, which is expected to close soon.

“The judgment … is wrong and poses very significant legal issues,” a spokesperson for Credit Suisse said in a statement, adding the trust intends to “vigorously pursue an appeal”.

A spokesperson for Ivanishvili was not immediately available to comment.

The judgment highlighted the trust’s failure to prevent private banker Patrice Lescaudron from having any further access to the Trust assets. Lescaudron was convicted in 2018 for running a fraudulent scheme in which he took money from Ivanishvili’s accounts to try to mask growing losses in other Russian clients’ portfolios. His progressively outsize bets using the Georgian’s money spectacularly backfired in 2015, exposing not just his fraud but also the cavalier way that his managers at Credit Suisse oversaw the banker-turned-fraudster.

The Bermuda judge who ruled in Ivanishvili’s favour last year said Credit Suisse’s life insurance unit turned a blind eye to Lescaudron’s wrongdoing.

A separate criminal investigation by Geneva prosecutors into whether Credit Suisse bears responsibility for Lescaudron’s fraud continues.

“The loss suffered by the plaintiffs is the difference between what would have been achieved if the whole portfolio had been removed and managed by a competent, professional trustee and the trust assets were not affected by fraud, and what was actually achieved,” judge Patricia Bergin wrote in her 248-page Singapore verdict.

If the parties are unable to reach agreement on costs and/or interest, they should file an agreed timeline for submissions on this matter by no later than June 30, according to the judgment.