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Credit Suisses António Horta-Osório loses board support after breach of Covid-19 rules




He came to fix the Credit Suisse Group AG sine

ruined culture. Then he became part of the problem.

António Horta-Osório was hoping for a blow to the wrist on Sunday from Credit Suisse CS 0.38%

board for breach of coronavirus quarantine rules on trips to events, according to people familiar with his departure. Instead, he had to leave his job as the bank’s chairman because he did not meet the high standards he set when he joined Credit Suisse eight months ago.

Mr Horta-Osório had to leave after most members of the board refused to support him at a meeting late in Zurich night, ending weeks of attempts by the bank to contain his latest crisis. A bank investigation into Mr Horta-Osório̵[ads1]7;s journey has revealed that he has broken quarantine rules in England and Switzerland since joining Credit Suisse, including to take part in the Wimbledon tennis final in July.

The Portugal-born banker also used private jets leased by Credit Suisse to combine personal travel and business travel that made someone on the board uncomfortable, according to people familiar with the matter.

Credit Suisse found that chairman António Horta-Osório had broken quarantine rules in England and Switzerland.


Photo:

Chris J. Ratcliffe / Bloomberg News

A spokesman for Horta-Osório said the jet use was “in line with the predecessor of his predecessor in the role and in fact similar to other senior colleagues in the bank. It was also never used without a business-related cause, and this has been confirmed by an internal audit.”

Some board members were concerned that Horta-Osório was no longer credible to employees or customers to fix what had been seen as a ruined culture in the bank around risk-taking, said people familiar with the matter.

The sudden departure adds a nightmare-like stretch for the bank. In February 2020, CEO Tidjane Thiam was thrown out of the bank’s board for failing to limit its reputation from a scandal that involved some employees being followed by private investigators. So last year it was hit by twin crises, with the collapse of the clients Greensill Capital and Archegos Capital Management.

Axel Lehmann, Mr. Horta-Osório’s successor as chairman of the board, who was appointed on Sunday, has been investigated by Switzerland’s financial regulator, after joining Credit Suisse’s board in October after working for rival UBS Group AG for more than a year. decade.

Mr. Lehmann is described by people who have worked with him as an archetypal Swiss professional, with a pleasant demeanor and tough interior. One characteristic he adds to the role is a highly functioning relationship with Swiss regulators and other power brokers in the country, some of the people said.

Mr Horta-Osório’s resignation makes him one of the biggest victims of a breach of the coronavirus rule. Two Canadian leaders resigned last year after traveling to be vaccinated. Separately, the head of a Canadian pension fund resigned after The Wall Street Journal reported that he traveled to the Middle East to receive an early vaccine dose.

In December, Mr Horta-Osório apologized to board members – and publicly – for leaving Switzerland when he was to be quarantined after a trip to London. He said it was unintentional. He also apologized to board members for using private jets leased by Credit Suisse to stop for a holiday in the Maldives on their way back from a business trip, said people familiar with the trip. His attitude was that the trip was in accordance with the company’s rules, according to some of the people.

The deterioration in some of the board’s confidence escalated after Reuters reported in late December on Horta-Osório’s Wimbledon trip and breach of quarantine, according to some people. In the new year, the board’s audit committee reviewed a report on his trip and quarantine violations, and Credit Suisse began preparing for Mr Horta-Osório’s possible departure, according to some people familiar with the matter.

Mr Horta-Osório attended Wimbledon’s tennis finals and believed that a waiver from England’s quarantine rules had been arranged for him by Credit Suisse, his spokesman said. Mr. Horta-Osorio participated in the tournament with family members and a bank adviser after Credit Suisse clients canceled, he said.

The timing of the missteps struck a chord with many Credit Suisse employees, and the orderly Swiss public. Swiss media compared Horta-Osório’s behavior with British Prime Minister Boris Johnson and tennis star Novak Djokovic, who angered this year because they appeared to be uninhibited from national coronavirus restrictions.

Credit Suisse is an elite banking brand abroad, but is based in Switzerland’s household and corporate customers of all sizes as the country’s No. 2 bank by assets. Having the top person who did not follow Swiss rules was seen as an unacceptable situation, according to some of the people familiar with the case.

One of the people familiar with the case said that Horta-Osório attended Sunday’s meeting in the hope of getting full support from the board, which includes recent appointments he has made. The chairman of the board resigned when it turned out that he did not have enough support.

Mr. Horta-Osório was to save Credit Suisse from being exposed to scandal. He received British chivalry for his latest job in turning Britain’s Lloyds Banking Group PLC,

add civilian prices in Spain, Brazil and Portugal. People who have worked with him said that he is demanding, demanding and takes his reputation seriously.

At the end of 2020, he agreed to join Credit Suisse as chairman, a prestigious role in Switzerland for an institution dating to 1856. The idea was that it should be his main job along with several other board mandates, to ease into a smaller more stressful life than driving Lloyds, according to people familiar with his planning.

Mr. Horta-Osório’s period in Lloyds was not without drama. Eight months into that job, in 2011, he took a two-month break to check in at a rehabilitation clinic suffering from fatigue. Then, in 2016, he apologized to Lloyd’s employees after the Sun newspaper published photographs of Horta-Osório, who is married and has three children, with another woman during a business trip to Singapore. He said he regretted the negative publicity and damage to Lloyd’s reputation. He said he paid for any personal expenses on the trip.

A few weeks before the start date of April 30, Credit Suisse suffered a loss of more than $ 5 billion when Archegos, a family investment company led by Bill Hwang, defaulted on large equity positions.

Mr. Horta-Osório tried to reset the risk button, remove the majority of Credit Suisse’s hedge fund units and centralize supervision of the main units. He urged employees to be more personally responsible and accountable for their actions, and, according to people familiar with the matter, he put CEO Thomas Gottstein and other top executives on notice to reach the top of the game or leave.

Write to Margot Patrick at margot.patrick@wsj.com and Emily Glazer at Emily.Glazer@wsj.com

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