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On June 18, the Autorité des Marchés Financiers informed Finma that Raiffeisen had experienced serious shortcomings in corporate governance. The report also mentions two cases where management has exceeded credit limits. In two cases, the board of directors should have been called, but that did not happen.
The exact circumstances as well as the size of these cases were not revealed by Finma. They appear only in the full investigation report. The management of Raiffeisen originally wanted to keep this secret – but it did not last long. Now the presidents and leaders of the 255 Raiffeisen banks can study the report. What they read is of extraordinary explosiveness, as taught by the SonntagsZeitung
White Loan on Unusual Conditions
The Finma states bluntly that " the administrative organization (the Raiffeisen) was incompatible with proper management ". This statement alone would have sufficed to overthrow former President Johannes Rüegg-Stürm. He came with the resignation in March before. Today, the behavior of management is relevant. He was under the direction of Pierin Vincenz until the end of September 2015. Patrik Gisel, the boss of today, was his deputy. He replaces Vincenz early October 2015.
The business relationship with the financial services provider Leonteq is a subject that directly affects the management of the company. They are assessed as a lump sum risk in the Finma report. If there are cluster risks, the board of directors must be involved in Raiffeisen. However, this did not happen in at least one case – namely when a well-known white loan was pronounced under unusual conditions. As a result, regulatory capital has been incorrectly declared. This information published by the Finma is explosive, since it concerns a procedure within a bank, which is classified in Switzerland as "too big to fail", which must be saved by the state in emergency case.
The interest of the Raiffeisen ruling couple?
The collaboration between Leonteq and Raiffeisen started on a large scale on March 12, 2013. At that time, the subsidiary Raiffeisen Notenstein bought 20% of the shares of Leonteq from the EFG bank for a good 70 million. Franks off. At the same time, Raiffeisen took over EFG's "unsecured credit facilities". At that time, it was also announced that Notenstein and Raiffeisen would cooperate with Leonteq in the future to produce structured products. As a result, Leonteq's price rises like a rocket: instead of 30, it pays about 150 francs per share in the spring of 2015.
Even an unexpected capital increase in the summer of 2014 did not started pricing appreciation. After all, Raiffeisen made sure that she got it right – and increased her stake to around 30%. According to the Finma report, the volume of the credit line in Leonteq is around 400 million francs.
But that's not all. In spring 2015, Raiffeisen – still through the intermediary of its subsidiary Notenstein – the founder of Leonteq, Jan Schoch, granted a personal loan of about CHF 45 million. Raiffeisen should have constituted provisions
If one adds a line of credit, a personal loan and a starting price when buying shares, the Raiffeisen group was at Leonteq with more than half a billion francs in risk. This was clearly an overall risk, as any expert can easily recognize it. But not Raiffeisen's leadership with Vincenz as boss and Gisel as his deputy. At least that's what they said to Finma.
It got worse: in the summer of 2015, prices in Leonteq dropped dramatically. Today, shares are still worth 50 francs. The loan to Schoch was no longer covered. Raiffeisen should have made provisions which did not seem sufficient. According to Finma, the regulatory capital has not been correctly reported. Since Raiffeisen was de facto owned by the majority of Leonteq through Schöch's registered shares, the question arises as to whether Raiffeisen would not have to consolidate Leonteq.
Why Raiffeisen's leadership has gone beyond her skills – blind or selfish – remains open. In any case, in the spring of 2015, it was announced that Gisel should be elected to the Leonteq Board of Directors; a year later Vincenz was made president Leonteq. Annual salary: 1 million francs. Thanks to Schoch's stock package, all this was easily accepted.
The role of Finma himself is debatable. She therefore gave Flyn's newly founded bank, Flynt, a banking license last summer, even though she knew of Schoch's tense financial situation. Shortly after, the bank was split and sold. Schoch himself had to sell his shares of Leonteq last summer and repay the loan Notenstein
Questionable Circumstances on the Investnet Affair
A second case described in the report Finma is not complete enough if relevant, even if it's after all about 1.5 million francs. Here, Finma dealt in detail with the acquisition of the subsidiary Raiffeisen Investnet and the sale of 15% of Investnet shares by the bank to Vincenz personally. The report notes that Vincenz has personally benefited from the acquisition of Investnet by Raiffeisen in 2011 and 2012. According to the Finma report, the subsequent sale of Vincenz's 15% stake in a meeting of the Board of Directors in February 2015 has been approved. At that time, the councils apparently already knew that Vincenz would soon resign.
However, the agreement with Investnet was not, as usual, labeled, but presented under the heading "Varia" as an alleged painting submission. Although they could not prepare, board members approved. In addition, the sale price of 1.5 million francs has not been questioned. The Finma criticizes that the price has not been verified independently before. However, the transaction was not completed until October 2015, that is after the departure of Vincenz as CEO of Raiffeisen – and thus in the Gisel era. Here too, he has come to an oversight. Because Vincenz's wife had been promoted to senior management, it was an organ loan that should have been approved by the board of directors. But not only did this not happen – there was not even a written sales contract. Gisel is also responsible for this process.
Nevertheless, the Finma Report does not address the role of Gisel and current management in the final evaluation – only those of Vincenz, the board and the organization as such. were not considered counterparts affiliated with a misinterpretation of the regulations. "
Raiffeisen says that the private credit to Jan Schoch has been fully repaid with interest.The loan to Leonteq is working capital for the issuance of structured products under the cooperation with Raiffeisen. Schoch and Leonteq were not considered counterparts affiliated with a misinterpretation of the regulations, says a spokeswoman. "This was corrected immediately after the criticism of the Prüfgesellschaft."
Raiffeisen also says that the Cluster risks are notifiable to Finma, but these loans are still eligible as long as the regulations are respected.
The loan to Pierin Vincenz was approved by the credit committee and later approved by the board of directors. administration as an organ loan. "A corresponding contract was still available," says the spokeswoman. "The CEO and management as such does not t never been involved in this case. " (SonntagsZeitung)
Creation date: 07/07/2018, 20:54
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