Swiss prosecutors file charges against Credit Suisse and UBS over ‘tuna bonds’ scandal | Credit Suisse
Switzerland’s federal prosecutor has filed criminal charges against failed bank Credit Suisse and its new owner, UBS, over the long-running “tuna bonds” lending scandal that collapsed Mozambique’s economy nearly a decade ago.
Swiss attorney general he said on monday He said he filed money laundering charges against an unnamed employee of Credit Suisse, but also filed suit against the lender and its former owner, rival UBS.
The attorney general’s office accused the banks of “organizational deficiencies” that ultimately failed to prevent abuses and meant that suspicious transactions were not reported until 2019, after the US Department of Justice announced it would launch its own criminal investigation.
The prosecutor added that “in 2016, there were significant flaws in the companies’ risk management, compliance and internal directive systems, especially regarding the fight against money laundering.”
UBS took over Credit Suisse in 2023 as part of an emergency rescue deal brokered by Swiss authorities. UBS said: “We unequivocally reject the attorney general’s conclusions and will vigorously defend our position.”
The tuna bond scandal arose from loans worth $2bn (£1.5bn) that Credit Suisse arranged for the Republic of Mozambique between 2013 and 2016. The loans were said to go towards government-backed investment schemes, including maritime security projects and a state tuna fishery in the southeast African country’s capital Maputo.
But some of the funds were undisclosed, and a Mozambican contractor later revealed he had arranged “substantial kickbacks” worth at least $137 million, including $50 million for bankers at Credit Suisse, to secure more favorable deals on loans. According to the Financial Conduct Authority.
The fraud snowballed and eventually caused the International Monetary Fund (IMF) to suspend its aid to Mozambique, leading to a collapse in the country’s economy.
Credit Suisse settled the case with regulators in the US and UK in 2021, paying $275 million to American watchdogs and £147 million to the UK’s Financial Conduct Authority.
UBS also later agreed to settle the case with Mozambique in October 2023, shortly before the trial began in London courts. Mozambique filed a lawsuit for compensation worth $1.5 billion due to economic losses after the IMF and international donors withdrew their financial support.
The Swiss attorney general’s office accused Credit Suisse and its owner of “failing to take all necessary and reasonable institutional measures during the relevant period in 2016 to prevent the money laundering allegedly committed.”
Credit Suisse was sold to UBS in March 2023 in an emergency deal as clients began withdrawing money from the lender amid a mini-banking crisis that primarily affected US lenders but later spread to Zurich.
Credit Suisse has been plagued by scandals for years, but panic over its future grew after its largest shareholder, the Saudi National Bank, refused to provide any extra funding to the Swiss lender despite the growing turmoil.
The crisis of confidence eventually forced Swiss authorities to offer emergency loans to Credit Suisse, and a shotgun takeover was eventually arranged by Switzerland’s largest bank, UBS, which bought the lender at a discounted price of 3 billion Swiss francs. This left UBS with a string of old scandals from its former rival.
