QIA stands to lose roughly $330 million on its equity stake in Credit Suisse as a result of the sale to rival UBS, Reuters calculations show.
Qatar’s sovereign wealth fund, Credit Suisse’s second-largest investor, has explored seeking redress for losses incurred by the bank’s takeover, reported Reuters, as legal challenges to Switzerland’s state-backed rescue mount.
The Qatar Investment Authority (QIA) sought legal advice on whether it had any claim against Swiss authorities, including through international arbitration, after Credit Suisse Group AG’s forced sale to UBS Group AG at a fraction of its market value, two sources familiar with the matter told Reuters.
The move by the $475 billion sovereign wealth fund to consider its legal options has not been previously reported.
Shareholders of Credit Suisse and UBS were not granted a vote on the deal that was sealed over one weekend in March.
Switzerland and Qatar have a treaty that lays out a process to settle disputes. The fund contacted a law firm that specialises in international arbitration and has offices in London and Paris, the sources said.
The law firm’s mandate, however, remains in an exploratory phase and a claim is not being actively pursued at this time, according to the sources.
One of the sources characterised QIA’s move to Reuters as work done to inform management of what their options might be, rather than instructions to act.
QIA stands to lose roughly $330 million on its equity stake in Credit Suisse as a result of the sale to rival UBS, Reuters calculations show.
QIA’s investment in Credit Suisse dates back to the global financial crisis of 2008.
Initially seen as a likely beneficiary of the existential threat faced by many of its rivals at the time – including UBS – a catalogue of subsequent missteps by Credit Suisse management and scandals erased billions of dollars of shareholder value.
Offsetting the decline in the stock over the years, QIA have received interest payments on Credit Suisse bonds that were part of its 2008 investment, leaving it with an overall gain, the source said.
The sovereign wealth fund had increased its stake in Credit Suisse to just under 7%, only trailing largest shareholder Saudi National Bank’s roughly 10% stake, according to a January filing.
