The Swiss Investor Protection Association (SASV), representing retail investors, intends to file the claim on behalf of around 500 Credit Suisse equity investors who experienced significant losses when UBS took over the bank in March. The takeover, orchestrated by Swiss authorities, didn’t allow shareholders in both banks to vote on the deal. UBS paid CHF 3 billion ($3.4 billion) for Credit Suisse, which was less than half the bank’s market value on the day before the deal was sealed.

This is the second class action against UBS by Credit Suisse shareholders, and there are several lawsuits being pursued by bondholders who were impacted.

UBS recently announced that it no longer required government support for the takeover, possibly aiming to reduce public discontent before national elections in October.

Also read: RBI allows UBS-acquired Credit Suisse to retain Indian banking license: Report

SASV plans to submit its case on August 14 under Switzerland’s Merger Act, meeting a two-month deadline from when the deal was approved in June. The general secretary of SASV, Arik Röschke, suggested that UBS might consider settling the case, as a ruling against them could potentially result in a requirement to compensate all shareholders, costing billions of dollars. However, settling out of court would only result in compensation for the claimants. “UBS took over one of the best capitalised banks in Europe at a bargain price in a horse-trading deal,” Röschke said. “Some of our claimants worked at Credit Suisse for 30 years and part of their payment was in stock,” he added.

The claimants in this case are from various countries, including the UK, US, Germany, Austria, Thailand, and Dubai. Many are former Credit Suisse employees who owned shares as part of their remuneration, Financial Times reported. The SASV case operates on a not-for-profit basis, with claimants asked to pay a fee to cover the association’s costs, which could be partly refunded. UBS declined to comment on the case. Niedermann Rechtsanwälte, the Swiss law firm has been retained to work on the case.

Also read: Credit Suisse-Archegos mess: UBS slapped with $400 million fine

This legal challenge follows a similar suit brought by legal services start-up LegalPass, backed by Ethos Foundation, representing institutional investors owning about 5 percent of stock in both banks. Additionally, Quinn Emanuel Urquhart & Sullivan and Pallas law firms are representing bondholders who were affected when $17 billion of additional tier 1 securities were written down as part of the transaction. Credit Suisse staff have also enquired about launching legal action after their bonuses linked to the AT1s were cancelled.

Mint could not independently confirm the details

Read in detail at Financial Times

Updated: 14 Aug 2023, 10:12 AM IST