the affair Vincenz by a shaken Raiffeisen an independent investigation (the report) found serious deficiencies in the acquisition of investments. Raiffeisen announces a comprehensive package of measures.
Three members of the Executive Board to take the hat. Gabriele Burn, and Beat Hodel had delivered the previous day by immediately their functions, wrote the Bank group in a message. Paulo Brügger had also declared immediately his resignation as a member of the Executive Board.
in order to be excreted, all of the members of the Executive management of the company, which had already been 2015 in the Era of Ex-Raiffeisen-chief Pierin Vincenz part of the body. Secretary Roland Schaub has left Raiffeisen immediately. Previously had already had Patrik Gisel, as a year long number two is the succession of Pierin Vincenz started, his boss items delivered.
image section – change of personnel at the Raiffeisen
It required a reboot, the tasks and challenges of Raiffeisen Switzerland are advancing, let the new Raiffeisen CEO Heinz Huber quote. The Evaluation of potential successors to be guided in the way, until then, the respective functions would be ensured by a substitute control.
“Raiffeisen was seen as a role model – locally, close to and in accordance with ethical principles of acting. This model has suffered. We strive to be sustainable to meet Lachapelle,” Chairman of the Board Guy.
criminal investigation
The investigation is under the leadership of Economics Professor Bruno Gehrig dealt with the equity transactions, Raiffeisen Switzerland and their daughters, since 2005, under former boss Pierin Vincenz bought had. The Zurich chief Prosecutor’s office is investigating the previously acclaimed Raiffeisen chief because of the potential for unfaithful business management.
The long-standing head of the Bank group played in the companies of the credit card company Aduno and the investment company Investnet acquisitions a double game, and personally have cashed it in. Aduno submitted in December 2017, Raiffeisen in February 2018 display against Vincenz.
No evidence of enrichment
Gehrig was no evidence that Vincenz, or other former or current bodies of Raiffeisen enriched themselves criminally relevant behaviour, or in person. However, those issues are already the subject of criminal proceedings, are exempted from the investigation.
Gehrig noted, however, that the Board of Directors and the Executive management had not exhibited in your leadership work undertaken. This had bought in respect to the diversification strategy, the Vincenz numerous companies.
Between 2012 and 2015, Raiffeisen Switzerland has expanded through acquisitions of investments in new business areas in the value of over one billion Swiss francs. Due to a lack of management and control, organizational failures, and a people-centered culture financial loss and reputational damage for the whole group to be created.
“culture of anticipatory obedience”
The report shows, on the basis of case scenarios and internal documents, what went wrong. Pierin Vincenz had not been involved with a few exceptions, directly in the negotiations to the participation of shops. He had, however, during the negotiations, bilateral talks outside the official bodies. “The participation transactions were left to the Board of Directors and of the Executive Board of Raiffeisen Switzerland in detail, and submitted for decision,” writes Gehrig.
“in Part, investments were acquired in accordance with the price expectations of the seller, without independent external review to obtain expert opinion, or without taking into account internal reviews sufficient,” stated Gehrig: different people have within the Raiffeisen Switzerland, criticism of the project organization, negotiation strategy, and the paid purchase prices practiced. “This criticism reverberated but unheard of when it was assumed that Pierin Vincenz wanted to carry out an investment,” wrote Gehrig.
There had been a culture of anticipatory obedience: “if You wanted the actual or perceived expectations of Pierin Vincenz.” Several Respondents indicated that they did not want to jeopardise the conclusion of transactions, which they believed, Vincenz wanted to bring to a conclusion. This meant that investments had been made which were, in retrospect, a strategically questionable. In addition, prices had been paid, were reasonable. For Pierin Vincenz to the strategic success in individual cases was more important than the purchase price, would have prohibited Respondents.
millions of losses
In the case of Raiffeisen Switzerland, acquired in 2013, indirectly, a minority stake in a company. For the package of shares, a price of a total of around 4 million Swiss francs was paid. The price was set without negotiation, with the primary notions of the seller accepted had been, it was said in published on Tuesday the investigation: “On an external valuation report was waived.”
The valuation of the shares by the seller have not validated the Raiffeisen-group in-depth. A deeper look into the books (so-called Due-Diligence) have only taken place five months after the conclusion of the contract. It had been to arrange for a subsequent adjustment of the purchase price in the contract.
Due to value adjustments Raiffeisen Switzerland have lost it at the end of the approximately 4 million Swiss francs which it had invested. Two years after the acquisition, sold to Raiffeisen Switzerland, the share package to the original seller and another Person back – for the symbolic price of one franc per share, as the report pointed out.
to go it alone by Vincenz
In another case, Raiffeisen Switzerland has expanded its strategic investment portfolio over the years, a shareholding in a company from 1 Million to 5 million Swiss francs, although the participation was always losing value. The investment decisions within the framework of the strategic portfolio have been taken by Pierin Vincenz, and with one exception neither the management nor the Board of Directors of Raiffeisen Switzerland, submitted for approval, as it was called.
The prices for the acquired shares were negotiated, nor by an external report or a Due Diligence to be validated. Overall, Raiffeisen over 10 million Swiss francs have invested in this company. “After the sale, for just under 3 million Swiss francs, the total loss of the investment on more than 7 million Swiss francs was,” wrote Gehrig.
Hefty allowance needed
In the next case, an indirect subsidiary of Raiffeisen Switzerland, a company whose shareholder value has been set in first internal assessment on 17 to 19 million francs acquired. The seller demanded first of all a much higher price.
a maximum purchase price of 35 million Swiss francs was Agreed upon finally. “For the assessment of the scenarios discussed have been revised on the pages of Raiffeisen Switzerland, by an external consultant who was close to Pierin Vincenz, first of all, in a way, that a company was able to value of 35 million francs, justified,” it said.
Later, this assessment was corrected to 27 million Swiss francs. It was agreed finally, however, a maximum purchase price of 35 million Swiss francs. Effectively, around 30 million Swiss francs were paid at the end, like Gehrig wrote.
Three years after the first investment had to be made on the participation in the accounts of Raiffeisen Switzerland, due to the unsatisfactory business situation, an impairment of 14.3 million francs. This corresponded to almost half of the invested amount.
value adjustments press profit
Due to the revaluation of the value of all existing investments, retaining the profit of the group and Raiffeisen Switzerland is expected to be significantly lower than in the previous year.
“move, The special effects in the framework of a maximum of 300 million Swiss francs,” said Raiffeisen on Tuesday in a Communiqué. Despite the profit diver’s sustainable earnings power, as well as the above-average equity ratio of the Raiffeisen group in place, it was said: “Raiffeisen is a well-capitalized Bank.”
operating profit in the past fiscal year 2018, however, should be strong again. It is expected to be in line with the previous year, it was said: “The Figures clearly show that the customers have kept the Raiffeisen banks in the past year.”
In the previous fiscal year 2017, the Raiffeisen group had earned as much as never before. The success of any business shot up 30 percent to 1.1 billion Swiss francs upwards. The group’s profit climbed 22 percent to 917 million Swiss francs. This was a new record. (ij/sda)
Created: 22.01.2019, 06:39 PM
