Credit Suisse Takes Fight Over $743 Million Awarded to Billionaire to Singapore’s Top Court

(Bloomberg) — A lawyer for a Credit Suisse trust seeking to overturn the $743 million in damages the bank owes to Georgian billionaire Bidzina Ivanishvili said the staff responsible did their “incompetent best.”

In a surprise concession to the challenge the Swiss bank faces in its appeal over its mishandling of rogue banker Patrice Lescaudron, the lead lawyer for Credit Suisse Trust Ltd. told a Singapore court on Monday that staff failed to inform their client of the illicit payments Lescaudron had made.

“Put it simply, they were trying to do their incompetent best to address” the unauthorized payments, Lee Eng Beng said at the hearing at the Singapore Court of Appeal. They went to their superiors about Lescaudron but the one thing they didn’t do by March 30, 2008 is to let Ivanishvili know, he said.

Lee and his team are seeking to have the award cut after a lower court earlier ruled that the bank’s trust had failed to safeguard Ivanishvili’s assets. It was revised down from an initial $926 million in a sprawling case spanning three continents.

The parent bank said that the original verdict was “wrong and poses very significant legal issues.” A spokesman for the bank declined to comment before Monday’s hearing. Since the litigation began, Credit Suisse has been taken over by rival UBS Group AG.

The fallout centers around the case of Lescaudron who 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.

Read more: Credit Suisse Loses Singapore Case Against Georgian Tycoon

Lawyers for Ivanishvili have always contended that the banker’s supervisors were aware or should have known of Lescaudron’s subterfuge, and if they didn’t should be held criminally negligent. The bank has always consistently countered that the Frenchman was a “lone wolf” who hid his crimes from his colleagues and bosses.

No one at the trust had knowledge of Lescaudron’s fraud for a specific period between 2006 to 2008 and staff did their best to flag the suspect transactions to superiors, Lee told the panel of three judges. But two of the judges questioned whether the trust exhibited “willful blindness” in relation to the wrongdoing.

One of them, Justice Andrew Phang Boon Leong, used the analogy of employees guarding a vault being confronted with the sound of drilling noises inside.

“Is your duty just to sit outside and do nothing unless you hear an explosion, the door is blown open?” he asked.

Under repeated questioning, Lee argued the trust’s employees were acting in good faith and without tainted consciences. He also argued the judgment generated overcompensation for Ivanishvili when just a fraction of the over 27,000 transactions the trust made were affected.

Ivanishvili’s lawyer, Cavinder Bull, countered that the judgment has correctly concluded that the trust put the interests of its parent Credit Suisse ahead of its obligation to its client. He also said the defense was downplaying what the trust actually knew about Lescaudron’s actions, as it had sufficient knowledge to know something “grave” was transpiring. He also disputed that the fraud encompassed a small number of transactions, since the whole portfolio was tainted by fraud.

The Bermuda judge who ruled against Credit Suisse in 2022 said the unit in that island nation had turned a “blind eye” to the rogue banker. It was the bank’s mishandling of that case that contributed to the plunge in shareholder confidence in the bank and its eventual takeover by UBS in March 2023.

Ivanishvili won more than $600 million in the Bermuda ruling, which Credit Suisse is also appealing.

Shopping Cart

Media Kit

    Data Protection

    Personal Data (“Data”) submitted for Media Kit (“Media Kit”), and/or collected in the form of first name, last name, email address and other contact details may be used for the purposes of inviting you to future events and for reaching out to you with content which may be of interest to you. For these purposes, The Digital Banker will share the Data with our associate companies (including event and content sponsors) to promote their products and services. You will also be automatically subscribed as a user on www.thedigitalbanker.com. If you would like to opt-out, email us at [email protected].

    By clicking Submit, you acknowledge that you consent/ have sufficient informed consent to the collection, use and disclosure of Data as set out above.

    The Digital Banker Summit

    Moving on from FTX: is 2023 the year of CBDCs?

    Indonesia, Jakarta

    Thailand, Bangkok

    Philippines, Manila

    Contact Us

      Data Protection

      The information you provide will be held on our database and may be used to keep you informed of our and our associate companies’ products and for selected third party mailings. Please tick the box if you would prefer not to be contacted for these purposes:

      Request Nomination Pack

        Data Protection

        The information you provide will be held on our database and may be used to keep you informed of our and our associate companies’ products and for selected third party mailings. Please tick the box if you would prefer not to be contacted for these purposes:

        Registration Form

          Data Protection

          The information you provide will be held on our database and may be used to keep you informed of our and our associate companies’ products and for selected third party mailings. Please tick the box if you would prefer not to be contacted for these purposes:

          Registration Form

            Data Protection

            The information you provide will be held on our database and may be used to keep you informed of our and our associate companies’ products and for selected third party mailings. Please tick the box if you would prefer not to be contacted for these purposes:

            Registration Form

              Data Protection

              The information you provide will be held on our database and may be used to keep you informed of our and our associate companies’ products and for selected third party mailings. Please tick the box if you would prefer not to be contacted for these purposes:

              Registration Form

                Data Protection

                The information you provide will be held on our database and may be used to keep you informed of our and our associate companies’ products and for selected third party mailings. Please tick the box if you would prefer not to be contacted for these purposes:

                Registration Form

                  Data Protection

                  The information you provide will be held on our database and may be used to keep you informed of our and our associate companies’ products and for selected third party mailings. Please tick the box if you would prefer not to be contacted for these purposes:

                  The world’s preeminent Private Banks and Wealth Managers are demonstrating a committed drive in innovation, advisory, new products and services to meet the sophisticated needs of their clients.

                  COVID-19
                  Amid economic activity revival on the back of the Covid-19 vaccine program, organisations moving from business continuity plans to stable working environments, together with the slightest improvement in unemployment numbers, forced the world to adjust to new realities. Coming to terms with the “new normal”, global investors are now on the look-out for attractive and stable investment opportunities.

                  Needs of Private Wealth customers and families worldwide have drastically changed due to the pandemic and banks have had to accelerate efforts to deploy a multi-channel service strategy and safeguard clients’ businesses and wealth against negative impacts of economic uncertainly.

                  The Global Private Banking Innovation Awards will recognise the world’s best private banks, wealth managers and asset managers that are championing innovation across advisory, service, products, customer experience and more.

                  Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. 

                  Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum.

                  Request Nomination Pack

                  Error: Contact form not found.