By Brenna Hughes Neghaiwi and John O’Donnell
ZURICH (Reuters) – Prominent Swiss investment adviser Ethos Foundation has called on Credit Suisse <CSGN.S> Chairman Urs Rohner to step down to take responsibility for the Swiss bank’s spying on executives.
The intervention comes as investors take sides over whether Rohner, Chief Executive Tidjane Thiam, or both should be held mainly to blame for a scandal that has rocked Switzerland’s second-largest bank.
The crisis erupted in September when Credit Suisse’s former star wealth manager Iqbal Khan, who had jumped ship to join rival UBS <UBSG.S>, confronted a private detective following him and his wife through downtown Zurich.
The bank said the case was an isolated incident run as a rogue operation by then-Chief Operating Officer Pierre-Olivier Bouee without the knowledge of Thiam or the board of directors.
But Swiss financial watchdog FINMA is conducting its own investigation after the bank subsequently acknowledged it had tailed former human resources head Peter Goerke as well in what it called another solo mission by Bouee.
Bouee admitted to organizing the first case of spying, but has not publicly commented on the second, after which he was fired.
Ethos head Vincent Kaufmann, who has been a critic of Rohner for years, told Reuters that Rohner should not stay on a further year, as planned.
“These cases within the management team make our doubts even stronger as to how the board is supervising the bank’s management and how the CEO is supervising his colleagues,” Kaufmann said.
Thiam should go too if it emerges he was aware of the spying incidents, Kaufmann added.
A spokesman for Credit Suisse declined to comment on behalf of the bank, Rohner and Thiam. The bank’s board is meeting this week to try to get to grips with the crisis.
The scandal should affect executive bonuses, Kaufmann said, adding the bank should appoint an external candidate with a track record in banking as its new chairman.
Ethos, which promotes socially responsible investment, encompasses more than 200 Swiss pension funds and public utility foundations. Its recommendations are widely followed in the Swiss investment community.
Amid an outcry over the scandal in Switzerland, several major shareholders have come out in defense of Thiam, a former Ivory Coast government minister, McKinsey management consultant and insurance executive.
Hired by Rohner in 2015 to turn around the bank, Thiam has sharpened its focus on wealth management, scaled back investment banking, and shored up its balance sheet by raising capital.
“Now that the bank is well positioned, we don’t believe the person who managed the turnaround should leave. It should be obvious if one of the two has to go, it shouldn’t be the CEO,” David Herro, deputy chairman of Harris Associates, said by email. Harris says it has a stake of about 8% in Credit Suisse.
In a letter to Rohner this week, seen by Reuters, U.S. hedge fund Eminence Capital said it was “increasingly disappointed with the actions taken by the board of directors, which has displayed an utter lack of support for its CEO”.
Eminence Capital says it has a nearly 1% direct stake in Credit Suisse plus options on more shares.
On his Instagram account, Thiam posted a picture https://www.instagram.com/p/B8KVhqnHjQW of himself surrounded by beaming senior management.
Sovereign wealth fund Qatar Holding, with a stake of more than 5%, and the Saudi Olayan Group, with around 5%, have not commented on the scandal or who should bear responsibility.
(Reporting by Brenna Hughes Neghaiwi and John O’Donnell in Zurich and by Svea Herbst-Bayliss in New York, Editing by Michael Shields and Mark Potter)