Swiss SoftBank probe

SoftBank Group has pulled about $700 million from a Credit Suisse Group fund after executives at the Swiss bank grew concerned that the Japanese conglomerate held conflicting roles in the fund that weren’t fully disclosed to other investors, according to people familiar with the matter.

The Credit Suisse probe began last month after bank executives became concerned about potential conflicts of interest in the fund, as well as three sister funds, which make money by providing short-term cash to companies.

The funds hold assets sourced from Greensill Capital, a UK-based financing firm. SoftBank owns a major stake in Greensill. The Credit Suisse fund in which SoftBank invested also provided financing to several other comlator, panies that SoftBank has invested in.

In essence, SoftBank was acting as both lender and borrower in a complex circle of transactions. Credit Suisse found that aspects of this arrangement weren’t fully disclosed to its investors, according to the people familiar with the matter.

The four funds that Credit Suisse reviewed manage about $7 billion and are sold to pension funds, corporate treasurers and wealthy families as safe, short-term investments.

Greensill’s business, known as supply-chain finance, involves paying companies’ suppliers faster than normal, but at a discount to the invoiced amount. The corporate clients, known as obligors, agree to pay back Greensill later.