Norway Sovereign Wealth Fund Demands Credit Suisse Audit Over 'Archegos Loss'

[Photo by Reuters Yonhap News]

[Asia Economy Reporter Park Byung-hee] Norges Bank Investment Management (NBIM), the world's largest sovereign wealth fund, plans to demand a management overhaul and a special audit at the shareholder meeting of Swiss investment bank Credit Suisse.

According to major foreign media on the 24th (local time), NBIM announced that it would oppose the agenda item at the Credit Suisse shareholder meeting that exempts the management from legal responsibility. This reflects their stance to hold the management accountable for the consecutive investment losses Credit Suisse suffered last year. The Credit Suisse shareholder meeting is scheduled for the 29th.

Credit Suisse incurred massive losses after investing in Greensill, a supply chain finance company, and Archegos Capital, a hedge fund managed by Korean-American fund manager Bill Hwang. In particular, Archegos caused Credit Suisse's largest trading loss in its 166-year history, amounting to $5.5 billion.

NBIM's announcement aligns with the positions expressed earlier this month by major proxy advisory firms ISS and Glass Lewis.

Additionally, NBIM stated its support for the shareholder proposal by the Ethos Foundation, which calls for a special audit conducted by an external party.

NBIM has reduced its stake in Credit Suisse from 3.4% at the end of 2020 to 1.5% by selling more than half of its shares.

Previously, other major shareholders of Credit Suisse, Harris Associates and Norges Bank Investment Management, also decided to vote against the reappointment of the Credit Suisse board members. Harris Associates and Norges Bank Investment Management hold 8% and 3% stakes in Credit Suisse, respectively.

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