A Singapore judge has ordered Credit Suisse to pay former Georgian prime minister Bidzina Ivanishvili $926 million, a deathblow to the bank before UBS is expected to complete its takeover as soon as next week.
Ivanishvili, Georgia’s richest man, had already won a case against the Swiss bank in Bermuda last year, taking $607.5 million.
The billionaire’s dispute with Credit Suisse dates back to 2011 when he was a client and victim of a private banker who defrauded some of the Swiss lender’s most sensitive accounts.
For more than a decade, Credit Suisse private banker Patrice Lescaudron defrauded some of the bank’s clients—including accounts owned by Ivanishvili and Russian oligarch Vitaly Malkin—funding a lavish lifestyle of luxury homes, sports cars, and Rolex watches.
A damning report on the case by Swiss regulator Fenma, which was inadvertently published two years ago, found repeated warning signs, evidence of hundreds of suspicious transactions and four formal disciplinary actions not taken by Credit Suisse.
The bank has long maintained that Lescaudron — who was criminally convicted in 2018 and died by suicide in 2020 after his early release — was a highly successful rogue operator who worked tirelessly to conceal his illegal activity from his superiors and colleagues. The Swiss criminal case against Lescaudron found that the bank was an aggrieved party.
A judge at the International Commercial Court of Singapore on Friday ordered local firm Credit Suisse to pay $926 million, less than the $79 million it has already paid. The judge said the amount should be recalculated in the Bermuda case so that there is no double recovery.
In a statement, Credit Suisse said it would “vigorously pursue an appeal,” adding that “the judgment published today is wrong and raises very important legal issues.” The bank is also appealing the Bermuda ruling.
After taking into account the money already returned to Ivanishvili and the award in the Bermuda case, Credit Suisse expects to pay $500 million after the ruling in Singapore if its appeal fails, according to people familiar with the matter.
They added that the provision allocated by the bank to cover the Singaporean case is less than this amount.
Credit Suisse was represented in the case by Charlie Falconer, a former British Lord Adviser who was close to former Prime Minister Tony Blair. Cavinder Bull SC of Drew & Napier served as chief advisor to Ivanishvili.
A spokesperson for Ivanishvili said: “We expect Credit Suisse to fully comply with the ruling and finally accept responsibility for its failures.”
The long-running spat with Ivanishvili is one of several legal battles that have flared up over Credit Suisse in recent years. UBS has committed $4 billion to cover Credit Suisse’s regulatory and litigation issues.
UBS’ takeover of its Swiss rival could be completed as early as next week after it received approval from European Union antitrust authorities for the deal on Thursday.
Speaking to Swiss newspaper Tages-Anzeiger on Friday, Swiss Finance Minister Karin Keller-Sutter, who played a pivotal role in aligning the country’s two largest banks, appeared to call Credit Suisse directors and CEOs “troublemakers”.
When asked if politicians bear some responsibility for the downfall of Credit Suisse, she said: “You have to be careful not to confuse firefighters with arsonists. The board of directors and the executive board are responsible for Credit Suisse – not the government.”