Equestrian horses shook a frozen lake in the Alpine town of Saint-Moritz, hitting the faces of men on skis behind them.
In February last year, weeks before the cancellation of public events in Switzerland, Credit Suisse relocated its most valued customers to White Turf – a equestrian event more than a century later sponsored by a Swiss bank on a unique dangerous “ski race”. decades
While seven fearless skiers risked their lives at the Grand Prix Credit Suisse, one of the most dangerous guests for the bank was British steel tycoon Sanje-Gupta.
Today, Gupta’s large GFG Alliance conglomerate is gaining momentum following the collapse of its largest lender, Greensill Capital. The group of metals is also being investigated by the UK Office of Serious Fraud. It denies any crime.
It was known that Credit Suisse was indirectly subordinated to Gupta through Greensill, which packaged loans in banknotes acquired by Swiss bank funds. When Greensill collapsed in March, Credit Suisse faced the fact that much of its debt could be bad, including loans to GFG.
What has not been widely known so far is that Credit Suisse also has a significant direct connection to Gupta.
A number of former Swiss creditor executives have revealed to the Financial Times how its private bankers և the world leadership is flattering the metal tycoon by offering him VIP treatment that goes beyond the St Moritz route.
By falsifying a deep relationship with the Indian-born manufacturer, Credit Suisse ignored the warnings of concerned corporate clients and its own bankers.
The discovery that Credit Suisse passed on to Gupta, from mortgaging the cup to a private audience with its then-CEO, will further anger its customers, who could lose billions of dollars.
Some of these clients are expected to sue Credit Suisse, accusing it of failing to manage its assets. And the problems with Grinzil come at a time when the bank is rocked by another risk management scandal – a collapsed family office for its work with Archegos.
“Entrepreneurs like the decision to finance [Gupta] “It was a wrong decision at any cost,” said one of the bank’s former Australian business executives, who blamed Gupta for lending money. The banker added. “It was a lot of capital, which went into a very risky situation.”
Credit Suisse and GFG declined to comment.
Five star treatment
After years of flattering Sanje Gupta, Credit Suisse filed for divorce in late March, petitioning the courts of Great Britain and Australia to make its main businesses insolvent.
With $ 1.2 billion to recover on behalf of angry customers, the Swiss bank has other tools at its disposal. Some of Gupta’s debt institutions in Greenwich used personal guarantees, provided by people familiar with the terms, that could allow creditors to pursue the so-called “steel man.”
To that end, Credit Suisse recently hired private investigators in Kroll to track down Gupta’s assets around the world, according to three people familiar with the case.
While Gupta was shopping for half a decade of corporate purchases with a 35,000-strong metal conglomerate, he also assembled a personal collection. cup assets, Splashy shopping ranged from a private jet և helicopter with toilet tail signs to և 42 million in a London mansion owned by his wife’s name.
Credit Suisse will not need Kroll’s services in another of Gupta’s luxury homes, a 19th-century sandstone mansion overlooking Sydney Harbor.
“Credit Suisse provided the collateral. “They were proud of it,” said the former executive. “Taking out overpaid mortgages in Australia was a key strategy.”
Helping Gupta buy a $ 35 million ($ 27 million) home owned by a trusted company controlled by an Australian stockbroker was part of a Credit Suisse service offered as his personal property manager.
The Swiss bank also owned the fortune of Lex Greensill, a 44-year-old Australian founder of Greensill Capital, who was a banknote billionaire before the collapse of his financial company of the same name.
Managing the capacity of controversial entrepreneurs was part of Credit Suisse’s program. Helman Sitohan, the Bank’s long-time Asia-Pacific leader, built a franchise that served the region’s richest businessman, including some reputational risks.
“We are positioning ourselves as a bank of entrepreneurs,” Sitohan said in February, days before the Greensill Capital invasion. “In Asia, that position has worked very well for us.”
Gupta և Greensil even shared the same private banker in Credit Suisse. Shane Galligan, one of Sitohang’s largest rainforests, whose mission was to raise money for Australia’s richest men.
“If you look at a very high net customer support strategy in Asia, no one in a private bank is bigger than him,” said Credit Suisse, a second former banker. “It simply came to our notice then. That was his thing. “
Galligan ensured that Gupta gained full five-star experience in Swiss banking. In addition, inviting the steel tycoon to the Alpine riding event, he mediated a coveted meeting in 2019 with the then CEO of the bank Tizhane Tiam.
According to former Credit Suisse bankers, Galligan & Sitong played a key role in allaying fears about the growing entanglement of the bank with Gupta and Greensil. A person standing near the bank said that Sitohang was not close to Gupta or Greensil.
Another former executive recalled that Galligan, Lara Warner, was chief risk-taking officer, while he left following the Greensil, Archegos fiascos, and several other bankers. :
“There is no sensitivity or risk assessment,” he said. “It was just a holiday. We want to give a bank to this entrepreneurial customer.”
Credit Suisse said Sitohang and Galligan declined to comment.
Flight to ur yurich
In February 2020, the same month that Credit Suisse welcomed Gupta to St Moritz, British banking regulators contacted SFO As for about consolidating his family’s opaque metals financing.
After that, the Swiss bank received a sharp warning. Merchant of goods in July 2020 The trafficker warned Credit Suisse that the bank’s supply chain funds appeared to contain suspicious invoices from the Gupta business empire. The warning came from the moment the bank was in the middle internal review funds raised by FT on their reports unusual relationship Greensill shareholder with SoftBank.
And yet, the Greensil-related funds not only provided loans to Gupta, Credit Suisse also considered offering its balance sheet to the steel tycoon.
In October 2020, Gupta unveiled a plan to seize control of Germany’s more than 200-year-old steel plant, Thyssenkrupp, one of Germany’s oldest and most iconic industrial concerns.
When the steel tycoon? revealed the daring application, he has not yet financed the debts, but in his pocket he had letters of support from two well-known financial institutions – Greensil և Credit Suisse.
Support for Thyssenkrupp’s application was not one-time. Another former top executive said that Credit Suisse’s investment banking division was “all over the place” to GFG, tempted by the potential payoff of a seemingly endless chain of deals, which he received as a mandate for his long list of InfraBuild businesses in Australia. ,
But the fees never came. Both deals collapsed earlier this year as Greensill began to be liquidated and threatened to take over the GFG.
Grensill’s fate was decided in the last weekend of February, when Credit Suisse made a decision freeze its $ 10 billion range supply chain financial assets, finding that the main insurance contract underlying the invoicing securities has expired.
After that fateful decision, Gupta and his loyal lieutenant flew to Ur Yurich on Friday. Ay hey Hambro, a generation of British banking dynasty. Twelve months later, when the steel baron was entertained by Credit Suisse at White Turf, he entered the Swiss lender’s Paradeplatz’s palace headquarters for a completely different reception.
People familiar with the discussions say that Gupta ամբ Hambron lobbied the bank not to change the funds.
This time, however, Credit Suisse was not ready to accommodate its once highly rated client.
Additional Report by Owen Walker և Stephen Morris