UBS faces legal challenge over Credit Suisse takeover, investors to lodge claim in Zurich court today

livemint.com:

Credit Suisse, as hundreds of individual shareholders, including former employees of Credit Suisse, are planning to lodge a claim in Zurich’s commercial court today, Financial Times reported. The Swiss Investor Protection Association (SASV), representing retail investors, intends to file the claim on behalf of around 500 Credit Suisse equity investors who experienced significant losses when UBS took over the bank in March. The takeover, orchestrated by Swiss authorities, didn't allow shareholders in both banks to vote on the deal.

UBS paid CHF 3 billion ($3.4 billion) for Credit Suisse, which was less than half the bank’s market value on the day before the deal was sealed. This is the second class action against UBS by Credit Suisse shareholders, and there are several lawsuits being pursued by bondholders who were impacted. UBS recently announced that it no longer required government support for the takeover, possibly aiming to reduce public discontent before national elections in October.

Also read: RBI allows UBS-acquired Credit Suisse to retain Indian banking license: Report SASV plans to submit its case on August 14 under Switzerland’s Merger Act, meeting a two-month deadline from when the deal was approved in June. The general secretary of SASV, Arik Röschke, suggested that UBS might consider settling the case, as a ruling against them could potentially result in a requirement to compensate all shareholders, costing billions of dollars. However, settling out of court would only result in compensation for the claimants.