Thomas Gottstein got into the crisis of his career. His appearance at a bank conference yesterday, intended as a liberation, backfired.
The initial surge in CS shares turned out to be a flash in the pan. According to a source on Paradeplatz, none of the major investors took hold of the CS stocks.
Whoever was behind the initial purchases: It didn’t help. At the end of the day, the share was again in the red.
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Nobody wants to burn their fingers with the CS – so the conclusion. For CEO Gottstein, a vote of no confidence par excellence.
The Swiss, who was chosen a year ago around the Spy affair, turns out to be the wrong choice.
He had the Greensill case on the table last summer after the Financial Times exposed opaque circular investments with CS funds.
Instead of pulling the plug on Greensill, Gottstein’s CS threw fresh money after the Australian financier. 160 million credit line last October, against warnings from your own risky people.
Now Greensill could turn out to be a criminal. The FT reports today from $ 200 million, which Greensill and his family would have reaped in 2019 by selling their own shares.
In Germany, the public prosecutor’s office is investigating the bankruptcy of Greensill Bank. The money house had lured municipalities and other state units to it with high interest rates.
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Under Gottstein, the CS not only approved a loan at an inopportune time, which the bank now has to chase after, but also advertised the Greensill funds in December.
At the investor conference, the CEO had his asset management boss Eric Varvel sing the praises of the Greensill funds. CS would expect more profit thanks to booming supply chain funds.
Two and a half months later the house of cards collapsed and Gottstein was on the floor. He hadn’t stopped the loan, and the CEO made the Greensill funds even bigger.
In 2020, the CS boss had the chance to quietly get rid of the problem – or at least to defuse it.
In the spring crash, the volume of the Greensill funds plummeted by several billion.
But as soon as summer came, we went in the other direction again. Most recently, pension funds and wealthy CS customers had invested $ 10 billion in the vehicles.
CS has paid back a good 3 billion of this so far. How much of the remaining 7 billion will fail and who will bear the damage is open.
One thing is certain: God shouldn’t be blamed for this. But the front.
Michel Degen, the Swiss asset management star, is already gone. According to the Tages-Anzeiger next could be Eric Varvel. That goes around in financial circles.
Both Degen and Varvel have failed. They had crept on Greensill.
And yet they are pawn sacrifices. Lara Warner, the head of risk, signed the loan in October, according to media reports.
But according to the Tages-Anzeiger it can stay. According to earlier press reports, her own subordinates in CS London had put her in the picture about Greensill Capital.
The CS insists that Thomas Gottstein did not play a role in the lending. Accordingly, the CS media people and, more recently, the bank’s external lawyers, insist on leaving Gottstein out of the picture.
Only: Under Gottstein’s command, the Greensill funds were put through their paces last summer; under his authority, the Aussie received a loan from the responsible risk committee for an IPO that was a long way off; under the leadership of the CEO, the CS still recommended in December the funds.
Actually, all too much. And yet Godstein should remain. The wagon castle on Paradeplatz contracts.
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