Ex-Georgia PM blames Credit Suisse unit for $1.78b losses in Singapore case

SINGAPORE/HONG KONG – Former Georgian prime minister Bidzina Ivanishvili alleged on Monday that a trust unit of Credit Suisse had failed to take steps to prevent him from losing US$1.27 billion (S$1.78 billion), as a Singapore court started to hear evidence in the case.

Mr Ivanishvili has accused Credit Suisse Trust in Singapore of failing to safeguard his investments and “take the appropriate steps” to prevent losses linked to fraud committed by its former Geneva-based banker Patrice Lescaudron.

The trust unit said in its opening statement “the quantum of damages claimed by the plaintiffs is extreme”, without mentioning the amount. It asked the court to dismiss the claim.

Mr Ivanishvili gave evidence to the Singapore International Commercial Court via a video link from Georgia. An opening statement from his lawyers said the trustee had calculated his losses at US$818.2 million, below their estimate of US$1.27 billion.

The case comes as new Credit Suisse chief executive Ulrich Koerner, promoted just over a month ago, aims to put the bank back on an even keel after a string of scandals.

Mr Koerner has been tasked with paring back investment banking and cutting more than US$1 billion in costs to help Switzerland’s second-biggest bank recover from setbacks and losses.

In a statement read to the court, Mr Ivanishvili’s lawyer, Senior Counsel Cavinder Bull, said US$1.1 billion had been placed under the custodianship of Credit Suisse Trust in 2005.

Lescaudron was Credit Suisse’s “conduit” for Mr Ivanishvili’s business and started “fraudulently mismanaging” the trust’s investments and “misappropriating” the trust funds as early as 2007, the statement said.

Lescaudron was convicted by a Swiss court in 2018 of forging the signatures of former clients, including Mr Ivanishvili, over an eight-year period. He admitted falsifying trades and hiding losses as part of a scheme that made him tens of millions of Swiss francs.

Lescaudron subsequently took his own life, court documents said.

‘Duty to protect’

Credit Suisse is reeling from billions in losses racked up in 2021 via failed investments, plus the impact of multiple legal cases, including a Bermuda court case, also involving Mr Ivanishvili, that could cost around US$600 million.

The Swiss bank has said its life insurance subsidiary, which is involved in the Bermuda court case and is in the process of being wound down, intends to “vigorously pursue” an appeal of a ruling from that court that it should pay out damages.

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