Swiss police have raided Credit Suisse offices and seized documents relating to the failure of the bank’s $10bn range of supply chain finance (SCF) funds that were linked to Softbank-backed Greensill.
Police carried out the raids last week after the Zurich public prosecutor’s office launched criminal proceedings into Greensill. The prosecutor’s actions followed a criminal complaint from the Swiss government’s economic affairs secretariat (SECO).
Its probe, which the Swiss newspaper NZZ am Sonntag first reported, centres around the way that Credit Suisse managed and marketed its funds that financed Greensill’s controversial lending schemes.
Credit Suisse confirmed to City AM that its offices had been raided, but said that the investigation was not directed at the bank itself.
“In the course of an official procedure that is not directed against Credit Suisse data were collected at Credit Suisse,” the bank said in a statement.
“Credit Suisse fully cooperates with the authorities and will, for the time being, not make any further statements on this as this is an ongoing investigation.”
SECO had filed a criminal complaint in relation to collapsed financier Greensill Capital for alleged violations of the law against unfair competition.
It filed its complaint against “persons unknown”, which gives the prosecutor’s investigation the potential to be extended at any point to individuals and companies that are yet to be named.
It comes after Credit Suisse’s asset management division suspended a $10bn range of funds in March that were linked to Softbank-backed Greensill, which collapsed into administration amid allegations of fraud and a lobbying scandal involving ex-prime minister David Cameron.
Although the Swiss lender has collected around $7bn of the fund’s assets so far, it has previously estimated that around $2.3bn remains at risk.
A fortnight ago, Credit Suisse riled clients who are already dealing with billions of dollars in losses from the failed supply chain finance funds with plans to land them with a further $145m bill this year, some of which it is using to preserve Greensill Capital.
Owing to the company’s insurance policy, Credit Suisse must ensure Greensill doesn’t fold, so that it can claim for non-payment of invoices and recoup the $2.3bn.
Thus, of the $145m being charged to investors in the failed funds, around $10m is being used to back Greensill’s remaining hundred-odd staff and to pay costs associated with the company, the Financial Times first reported at the time.
Investors in the funds were led to believe that its popular SCF funds were among the lowest risk investments it offered, as the loans they held were fully insured against losses and backed by invoices that were usually paid in a few weeks.
But as the funds swelled to $10bn, a substantial amount of the money was then lent through Greensill and against invoices for future sales had not taken place but were just predicted.
Both SECO and Zurich’s public prosecutor’s office have been contacted for comment.