October 1, 2019 / 10:15 AM / 6 months ago

Breakingviews - Thiam absolved but not unscathed in spy scandal

Swiss bank Credit Suisse CEO Tidjane Thiam waits for a news conference after the Swiss Global Digital Summit in Geneva, Switzerland, September 2, 2019.

LONDON (Reuters Breakingviews) - Oscar Wilde once quipped that losing one family member could be regarded as unlucky, but losing two looked like carelessness. Credit Suisse boss Tidjane Thiam looks similarly hapless following the departure of his closest ally on Tuesday after the latter hired spies to tail an ex-employee. It’s the second key staff member to head out the door in three months.

Shareholders may feel relieved that Thiam is staying in the post – not least as there are few obvious successors. An internal investigation initiated by Chairman Urs Rohner cleared Thiam, and the Credit Suisse board, of any wrongdoing after concluding they had no knowledge of the decision to hire private investigators to tail ex-wealth head Iqbal Khan.

That was a decision taken – and secretly hidden – by Chief Operating Officer Pierre-​Olivier Bouée and the bank’s head of security, the internal probe found. Both have resigned following an alleged altercation between the hapless spies and Khan in the middle of Zurich on Sept. 17.

Thiam’s vindication is bittersweet. Bouée has followed his fellow McKinsey alumnus from UK insurers Aviva and Prudential to the Zurich-based lender over the past 15 years. The fact that such a close personal ally essentially went rogue in trying to determine whether Khan was poaching employees constitutes a painful blow, and a surprising one.

There is an added piquancy in the fact that Rohner acknowledged Thiam had badly fallen out with Khan earlier this year due to a private disagreement that flared at a garden party. The chairman later helped broker Khan’s departure agreement – with only three months leave – after it became apparent the CEO and the bank’s chief wealth manager couldn’t work together. The latter is now set to join UBS.

Back in 2016, Thiam’s tenure got off to a rocky start when the bank lost almost $1 billion on high-risk trades that had been increased without the knowledge of senior executives including himself. Now as then, knowing about something that damages the bank’s reputation is clearly worse than not knowing. But in both cases, ignorance is not exactly a great look.


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