The chairman of UBS apologised Wednesday for the Swiss banking giant's role in helping some US clients evade taxes, but urged shareholders to waive their rights to sue former executives. "I am aware that UBS triggered this problem itself and we are deeply sorry," Kaspar Villiger, chairman of the bank, told over 4,000 shareholders gathered in the northern Swiss city of Basel for the bank's annual general meeting.
UBS, the US and Swiss governments last August reached an agreement that requires the bank to reveal the identities of 4,450 American account holders suspected of having evaded US taxes. In return, US authorities are prepared to drop their lawsuit against the bank. However, this controversial deal now hangs in the balance, as it is pending approval from the Swiss parliament.
Villiger on Wednesday urged parliament to approve the deal, saying that a failure of the accord "would damage Switzerland's credibility abroad and could dramatically impact economic relations with the US." But the chairman also called on shareholders to approve a proposal to discharge former top executives, thereby exempting them from possible lawsuits unless new evidence came to light.
Villiger noted that nearly 10 internal and external investigations had failed to find evidence of criminal wrongdoing, and that bringing legal charges may not be in the interest of the company or shareholders. "Experience shows that such trials last a minimum of 10 years, cost millions of francs, keep a company in the headlines for years, lead to a paralysis within the company and in the end turn out to be much ado about nothing," he added.
But several among the long list of shareholders who had signed up to speak were against the proposal, as they wanted these former executives to be taken to account for the bank's recent woes. Monica Eggmann, a shareholder told the meeting: "Say 'no' to the discharge of ex-managers. Not even when these have been cleared from their guilt legally.
"Say 'no' because they were part of a sick system, say 'no' because they enriched themselves beyond moral obligations," she said. Just hours before the meeting, a parliamentary commission also urged shareholders to reject the proposal. Some shareholders also contested the probes undertaken by the bank. Roby Tschopp, director of Actares - a group of small shareholders - told AFP that details were scant on the investigations.
Tschopp added that a parliamentary commission is expected to begin a separate probe in June, and therefore it would be inappropriate to discharge the former executives now. Shareholders were also unhappy about salaries paid out since the crisis. "It's disgusting, it's irresponsible, it's indecent," said one shareholder, Rene Zeyer.
But Villiger defended the bank's pay policies, warning that sharp cut backs on compensation last year caused the bank to "lose entire teams, their clients and their corresponding revenue - it was too high a price to pay." The iconic bank in Switzerland sank into the biggest annual loss in Swiss corporate history in 2008, losing 21.29 billion francs, as its bets on the subprime mortgage market in the United States soured. US tax authorities added another blow through two lawsuits against the bank for helping American clients to evade taxes.
The bank paid 780 million dollars to settle one of the cases. In the other case, it agreed to deliver data of 4,450 clients to the US authorities. The bank has been struggling to build its reputation since, with outflows reaching 226 billion francs in 2008 and 147.3 billion francs in 2009 as clients took their assets elsewhere.
On Wednesday, the bank's chief executive Oswald Gruebel said the bank "will have to accept further outflows before we can turn this trend around" even if the bank is "back on track." The bank had announced this week that it would report a pre-tax profit of at least 2.5 billion francs for the first quarter. Its full quarterly earnings report is due on May 4.
Comments
Comments are closed.