Credit Suisse has been embroiled in further controversy over its links to Sanjeev Gupta after details emerged about the Swiss lender’s direct relationship with the tycoon.
Former executives at the bank told the Financial Times that leadership wooed Gupta, offering him a string of services as his private wealth manager, as well as VIP treatment.
Gupta’s GFG Alliance is on the brink of collapse following the demise of its biggest lender Greensill Capital and is now facing a fraud investigation. It denies any wrongdoing.
While Credit Suisse was known to have an indirect exposure to Gupta via Greensill, the revelations of its direct relationship is likely to spark anger among clients.
Many are facing billions of dollars in losses, with some expected to sue the bank over alleged mismanagement of funds.
According to the report, Credit Suisse provided Gupta with a mortgage for a $27m mansion overlooking Sydney harbour, among a range of other services.
He also received VIP banking treatment including a trip to a horse racing event in the Alpine resort of St Moritz and a private meeting with then chief executive Tidjane Thiam.
Credit Suisse is said to have ignored warnings from concerned corporate clients and even its own bankers over the links.
In February 2020 British banking regulators contacted the Serious Fraud Office (SFO) with concerns about Gupta’s opaque empire.
Then in July commodities trader Trafigura warned Credit Suisse that the bank’s supply-chain finance funds appeared to contain a suspicious invoice from Gupta’s business empire.
But the Swiss lender continued lending to Gupta and even considered offering up its own balance sheet to the steel magnate as well, according to the report.
“The decision to finance entrepreneurs like [Gupta] at any cost was the wrong decision,” one former senior executive at the bank told the FT. “It was a lot of capital going to a highly risky situation.”
The revelations raise questions over Credit Suisse’s strategy of offering services to high-net worth individuals despite concerns about the risk.
The relationship with Gupta ultimately ended bitterly in March, when Credit Suisse petitioned courts in the UK and Australia to place several of the tycoon’s businesses into insolvency.
Credit Suisse declined to comment.