Credit Suisse needs money and trust. The big bank wants to buy both from its shareholders. CS should be able to raise the money – about four billion francs – at Wednesday’s extraordinary general meeting, but things look much more bleak for the currency “trust.”
Above all, it is about reinforcing the confidence of shareholders that the bank will truly manage to emerge from its deepest crisis with its bailout plan. Transparency is important for building trust, and the Extraordinary General Assembly is a tragedy in that respect.
meeting in the meeting room
The General Assembly is held in a small group in a meeting room at Paradeplatz, and neither the shareholders nor the public can follow the event, let alone ask questions directly to the Board of Directors. CS apparently avoids conflict with its owners.
“A missed opportunity. CS could have demonstrated its willingness to create full transparency and engage in a dialogue with shareholders,” laments Roger Said (51), Managing Director of Actares, an organization made up of individual shareholders.
Vincent Kaufmann, 42, director of the Ethos investment foundation, said of the bank’s approach, “It’s a scandal!” says. “We are very disappointed and shocked that the bank did not invite its shareholders to a physical general meeting for such an important decision.”
Oil money jeopardizes sustainability goals
Therefore, both Actares and Ethos must pass their votes to the independent shareholder representative. Both organizations will partially approve the capital increase. The issuance of shares to new investors, which is the first item on the agenda, is particularly criticized. Because future profits are distributed to more shares, that is, they are diluted. If the bank eventually starts making profits again, it will be less for the individual shareholder.
Ethos brings a second reason. The investment foundation is annoyed by its new anchor shareholder, the Saudi National Bank. “Ethos is concerned that the involvement of Saudi investors will help the bank’s long-term goals in tackling climate change,” Kaufmann said. Even if the capital increase is necessary for the bank, the flow of Saudi oil money into CS’ coffers is not really sustainable.
Despite opposition from small shareholder associations: the capital increase will likely be approved at the general meeting. Because CS may have discussed capital measures prior to the announcement with existing major shareholders such as Harris Associates, Qatar Holding or Olayan Group.