A Credit Suisse Group AG unit was 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.
(Bloomberg) — A Credit Suisse Group AG unit was 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 $926 million, minus deductions for an earlier settlement. The amount will be further revised down “to ensure there is no double recovery” after a Bermuda court last year awarded Ivanishvili more than $600 million in damages in that case.
Singapore-based Credit Suisse Trust Ltd. breached its duty to the plaintiffs in failing to safeguard the trust assets, according to the ruling judgment published Friday.
Read more: Credit Suisse ‘Turned a Blind Eye’ to Rogue Banker, Says Judge
The ruling marks another major setback for Credit Suisse after the loss to Ivanishvili in Bermuda court, a conviction for money-laundering in Switzerland and a raft of other scandals that undermined investor confidence in the bank. The bank had to accept a controversial government-brokered takeover by UBS Group AG, which is expected to close soon.
“The judgment published today is wrong and poses very significant legal issues,” a spokesperson for Credit Suisse said in an emailed statement, adding the trust intends to “vigorously pursue an appeal.”
A spokesman 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 and mask growing losses in other Russian clients’ portfolios.
His increasingly outsized bets using the Georgian’s money spectacularly backfired in 2015, exposing not just his fraud but also over time the cavalier way that his managers at Credit Suisse oversaw the banker-turned-fraudster.
The Bermuda judge who ruled in Ivanishvili’s favor last year said CS’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.
Cavinder Bull from Drew & Napier LLC was lead counsel for Ivanishvili. Lee Eng Beng from Rajah & Tann and Allen & Gledhill LLP represented the trust.
–With assistance from Patrick Winters.
(Updates with background on Lescaudron case from the seventh paragraph)
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