“It’s better than doing nothing”

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At least 80 Credit Suisse investors in Singapore are in talks to sue the Swiss government. This was reported by the Financial Times. Once again, it’s about the write-off of AT1 bonds from Credit Suisse, called Coco Bonds, worth US$17 billion mandated by the emergency law as part of the takeover by UBS.

Bondholders believe the move violates the “protection from unfair government actions” agreed upon under the Free Trade Association signed between Singapore and Switzerland in 2003. Law firms Wilmer Hale and Engelin Teh Practice are preparing to file the case.

Risky AT1 bonds are said to be popular with individual investors in the region. Investors in Singapore have collectively invested around $70 million in AT1 bonds. Plaintiffs are waiting for other investors to join the lawsuit. Observers also assume that the talks in Singapore could lead to similar activities in other parts of Asia.

This opens another “front” against Switzerland. US bondholders are represented by the law firms of Quinn Emanuel Urquhart & Sullivan and Pallas Partners. According to Wilmer Hale, unlike the USA, Asian countries should have special protection mechanisms for foreign investments. Also, there are fewer large funds and more private investors affected.

Low chance of success

Whether the legal arguments are sufficient is doubtful in many places. Investors don’t seem to expect to get their money back themselves. However, some seem to want to take legal action in principle.

“I’m not optimistic, but it’s better than doing nothing. I want to be at the forefront of this fiasco and hopefully learn something,” said one Singaporean investor. Another private investor who lost $700,000 in AT1 bonds says: “I invested because I trusted the brand. Now I have nothing.”

Source :Blick