The investigation by eminent professor Bruno Gehrig into what went wrong at Raiffeisen Switzerland didn’t reveal any criminal offenses. But the bank nonetheless is far from closing this particularly dark chapter of its history. Here are the six issues waiting to be resolved.
«No, we are not going to retract anything,» said Raiffeisen Chairman Guy Lachappelle (pictured below), asked about the criminal complaint directed at former CEO Pierin Vincenz. The question was raised after today’s publication of the report about the affair written by former central banker Bruno Gehrig.
Gehrig only looked at the internal events, Lachapelle added. The external aspects of the Vincenz affair and the investments in companies made by Raiffeisen, remained the prerogative of the prosecutor’s office in Zurich. The bank will uphold its complaint while the authorities keep digging.
The prosecutors' investigations alone will keep the bank busy for months to come, Lachappelle told the media on Thursday. And at the same time, it will deal with the internal aspects of what went wrong as well.
1. New Investigation Into Management Failures
Homburger, the law firm that helped Gehrig in his investigation, has received a new mandate from Raiffeisen. The lawyers will determine whether the bank has ground to claim compensation from the people responsible for the shortcomings described in the Gehrig report. The professor had unearthed evidence for bad and unprofessional management in the years from 2012 through 2015. The conclusion was a major disappointment for the bank, which had seen its reputation tarnished and also saddled with financial consequences of the sordid story.
The report authors accused bankers for having failed in their controlling duties and for their woeful due diligence in connection with the acquisition of stakes – and perhaps most damning is the verdict that some of them had been in thrall to the charismatic boss.
Several bankers told Gehrig that the normal hard bargaining process over the price of a transaction never took place because they knew or thought to know that Vincenz wanted the deal sealed. One email put it succinctly: «If Pierin Vincenz decides to buy – then bought it will be.»
2. Release Deferred
The bank won’t put the release of the board on the agenda of its annual general meeting before it hasn’t settled the question of who is to blame for what. The necessary steps will follow over the course of the year.
3. Write-Off Impairs Profit
The bank has analyzed the value of its investments and come to the conclusion that it will post a lower profit as a consequence for the year 2018. The chairman said that the one-time effects won’t exceed the amount of 300 million Swiss francs ($300 million). Raiffeisen will try to recoup what it lost through the decline in value of its stakes, he added.
4. Unbundling of Business
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