Raiffeisen has pledged a no-holds-barred investigation of the scandal surrounding its former CEO Pierin Vincenz. The bank has clinched a respected former Swiss policymaker and UBS banker to do so.
The St. Gallen-based lender said it wants a «complete» investigation of the Pierin Vincenz era. The Swiss banker ran Raiffeisen until three years ago, but has been remanded in custody for nearly six weeks now pending a criminal investigation of alleged secret side deals during his time at the bank.
Raiffeisen secured Bruno Gehrig as a «lead investigator», the bank said in a statement on Wednesday (in German). Alongside Gehrig, who is a highly respected member of Switzerland's finance community and a former central bank governor, Raiffeisen said it is hiring influential securities law firm Homburger.
The goal of the investigation, which Raiffeisen refers to as independent, is to probe stakes that Raiffeisen and its subsidiaries took beginning in 2005, including in the wake of the financial crisis, when the bank was awash in cash and keen to diversify.
Weighty Credentials
The 71-year-old Gehrig's credentials are stellar: the economist rose in the ranks at UBS' predecessor bank, Swiss Bank Corporation, and also worked for Swiss regulator Finma's predecessor, the Swiss Banking Commission, and was a governor of Switzerland's central bank. His last posting was as chairman of insurer Swiss Life from 2003 to 2009 as well as board mandates at drug firm Roche, airline Swiss and from 2008 to 2014 on UBS' board.
Gehrig and Homburger will not be able to evaluate transactions and firms which Zurich's prosecutor is currently investigating – including stakes in payments firm Aduno and private equity company Investnet. The bank pledged to address any potentially criminal or regulatory matters the investigation may turn up consistently and with suitable measures. Finma and Zurich's prosecutors have been informed of the plan, Raiffeisen said.
Pile of Reviews
The push is long overdue from Raiffeisen, which come shortly after Pascal Gantenbein took over as chairman when former overseer Johannes Rueegg-Stuerm stepped down suddenly when the expanse of the criminal investigation emerged. The bank has since joined the criminal investigation as a private complainant, which is possible under Swiss law.
Vincenz's successor and Raiffeisen's current CEO, Patrik Gisel, has held on to his job, but is believe to be on thin ice. His career has very closely tracked that of Vincenz, his mentor. Gisel is not the subject of the criminal investigation, nor have any charges been levied against him.
The result of the investigation by Gehrig and Homburger will be keenly awaited in Switzerland. The bank had in the past already ordered three such reviews to probe Vincenz's buying spree. None of the investigations, including one led by former Swiss Re Chairman Peter Forstmoser, a partner with securities law firm Niederer Kraft & Frey, had any consequences for the bank or its then-CEO.
