Credit Suisse was ordered to pay $926 million to Georgia’s former prime minister on Friday for the loss of part of his fortune, in a Singapore court ruling that represents one of the largest legal awards ever made against a bank.
Singapore’s International Commercial Court said a unit of Credit Suisse did not act in good faith and neglected to keep Bidzina Ivanishvili’s assets safe, in the latest blow to the troubled bank, which was taken at UBS.
Credit Suisse then said it would appeal the decision.
Billionaire businessman Ivanishvili, who was prime minister of Georgia from 2012 to 2013, placed $1.1 billion under the care of Credit Suisse Trust in 2005, the court heard.
Ivanishvili’s lawyers Cavinder Bull and Woo Shu Yan from law firm Drew & Napier said Credit Suisse Trust’s failures led to fraudulent mismanagement and huge losses.
In its ruling published on Friday, the court said the bank had failed to protect Ivanishvili’s assets by preventing Patrice Lescaudron, an adviser at Credit Suisse Trust in Singapore, from having access to them.
Lescaudron was convicted by a Swiss court in 2018 of forging the signatures of former clients, including Ivanishvili, over an eight-year period. He admitted to falsifying trades and concealing losses in a scheme that made him tens of millions of Swiss francs. He was released in 2019 and killed himself in 2020.
“The defendant’s conduct is unacceptable,” Judge Patricia Bergin said in a written ruling.
“It prioritized the importance of Mr Lescaudron in maintaining the large client, the plaintiff, with the Credit Suisse organization over complying with its primary obligation to keep the Trust’s assets safe.”
Credit Suisse knew Lescaudron had violated regulations designed to prevent fraud and waited up to two years for a response from him when questioned, Bergin said.
“To allow these blatant violations is not in good faith and is unreasonable,” Bergin added.
The $926 million Credit Suisse will pay will be reduced from the $79 million it already paid in December.
“The ruling published today is wrong and raises very important legal issues,” Credit Suisse said in a statement. “Credit Suisse Trust Limited intends to vigorously pursue an appeal,” it added.
The bank is also appealing against another ruling related to its handling of Ivanishvili’s assets.
A court in Bermuda ruled in March 2022 that Ivanishvili and his family were liable for damages of almost $600 million from the local Credit Suisse life insurance.
The final amount due to Credit Suisse should be further reduced to prevent an overlap with the Bermuda case and prevent a so-called double recovery, the court said. Credit Suisse is currently appealing the decision in Bermuda.
A person familiar with the matter said the overlap was estimated at about $300 million and that Credit Suisse had already made provisions for part of the total payment.
In the case of Singapore, the bank will appeal on the basis that the compensation related to money lost due to poor investment decisions rather than fraud alone.
Ivanishvili’s spokesman welcomed Singapore’s decision.
“Despite the judgment in Bermuda last year and the admission of breach of duty during the Singapore trial, Credit Suisse continues to frustrate our clients’ efforts to seek compensation for crimes committed in its employees,” the spokesperson said.
“We expect Credit Suisse to fully comply with the ruling and ultimately accept responsibility for its failures.”
(Editing by Alexander Smith)
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