The criminal investigation against Pierin Vincenz is reportedly sparking changes at the top of Raiffeisen Group, the Swiss lender he ran for 16 years.

Raiffeisen Chairman Johannes Rueegg-Stuerm is preparing to step down, Swiss daily «Tages-Anzeiger» reported on Thursday, citing several sources. Rueeg-Stuerm, a professor at Switzerland's prestigious University of St. Gallen, won't stand for reelection at the cooperative bank's annual general meeting in June. 

The move comes as Raiffeisen's former CEO, Pierin Vincenz, enters his second week in custody amid an investigation of whether he acted in bad faith when making investments on behalf of the bank in which he also personally participated. Vincenz has denied wrong-doing.

Full-Time Job?

The affair has roiled the bank: just days ago, Rueegg-Stuerm said he would stand for another two-year term. By mid-week, the pressure on him appeared to have grown too heavy to shoulder. Raiffeisen's board had discussed the issue intensely, the paper reported, and the bank plans to soon disclose that Rueegg-Stuerm will step aside in summer.

A spokeswoman for Raiffeisen didn't comment on the report. The chairman's departure may simply be a byproduct of the job being a full-time roll in future, as opposed to the 20-hour weekly stint that Rueegg-Stuerm is paid 480,000 Swiss francs annually for currently.

Raiffeisen's detractors have criticized the bank's board as not active enough to rein in Vincenz, an ambitious and dynamic Swiss banker who ran Raiffeisen for 17 years. Ruegg-Stuerm, who has chaired the bank since 2011, has dismissed the notion he exercised lax oversight of the retail lender.

«Unfortunate Combination»

He signaled that he and others had been given false or incomplete information by Vincenz. While rejecting criticism that Raiffeisen's board failed to spot the alleged wrong-doing, Rueegg-Stuerm conceded that hiring Vincenz's wife as head of the bank's legal department was an «unfortunate combination» that he would handle differently today.

Vincenz is suspected of enriching himself with personal investments in firms that Raiffeisen also bought stakes and, later, of representing both buyer (the bank) and seller (himself). The scandal may cast a wider net: Vincenz's protege, Patrik Gisel, currently runs Raiffeisen and was on the board Investnet, one of the firms being scrutinized by prosecutors. Last week, Gisel said he would not step down as CEO of Raiffeisen.