Credit Suisse’s Answers in Spy Scandal Raise More Questions 

(Bloomberg) -- Credit Suisse Group AG provided some answers in an effort to draw a line under a spying scandal that rocked Switzerland’s No. 2 lender after 10 days of turmoil that at times had more in common with thriller fiction than the discreet workings of a bank catering to the needs of the world’s wealthy. A disagreement between two top executives escalated into a tale of personal ambition, corporate espionage and even death.

The resignations of two executives who took responsibility for the shadowing of the former head of international wealth management -- and the findings of an internal probe that the lender presented in Zurich on Tuesday -- left some questions open and raised new ones.

Here’s what’s still unclear:

Why did Thiam’s longtime lieutenant not get the CEO’s signoff?

Credit Suisse’s official report said that Chief Operating Officer Pierre-Olivier Bouee acted alone when ordering the botched surveillance of former wealth management head Iqbal Khan. Swiss law firm Homburger -- which conducted the investigation -- said there was no indication that Chief Executive Officer Tidjane Thiam was aware of the situation.

Some have expressed surprise that a key lieutenant would have gone behind his boss’s back, especially given their close working relationship over a decade at multiple companies. Thiam himself hasn’t commented in public on whether he was made aware and was also absent from the press conference into the investigation. Chairman Urs Rohner said that Thiam has the board’s and his personal backing after the incident.

Did Thiam and Khan’s falling-out play a role?

There’s no evidence that a personal dispute between the two executives dating back to a January party at Thiam’s house played a role in the surveillance. But their private conflict wasn’t part of the investigation.

Thiam and Khan are direct neighbors in the upscale town of Herrliberg, outside Zurich, and Khan’s abrupt exit occurred just half a year after their fight. He negotiated his exit agreement directly with Rohner instead of Thiam, and was allowed to start his new job after just three months off, in contrast to the more typical six months.

What do we know about the deleted messages?

Law firm Homburger noted that it only had access to some private communications during the probe, while others were deleted. Bouee and the security team used an encrypted app, Threema, but only parts of their exchanges were available. Who knows what the missing messages might have revealed. Homburger also had no access to files of police and prosecutors examining the showdown between Khan and the spies in downtown Zurich, which triggered the scandal.

Thiam didn’t use the application, and there was no contact between Thiam and Bouee involving the Khan surveillance on their WhatsApp messages or the internal Credit Suisse system, the lawyer in charge of the probe said. But the firm only looked at messages covering a period of about a month.

Does this mean the probe is over and settled?

Well, yes and no. For Credit Suisse, it is over. The bank has replaced the COO and exonerated Thiam, who would have been difficult to replace with no obvious successors in sight. Thiam had received the backing of a key shareholder, who warned that replacing him would be damaging as the bank just started to emerge from a three-year restructuring.

But prosecutors are still looking into the death of a Credit Suisse contractor who took his own life last week after the private investigator he’d hired became front-page news in the Swiss tabloids. They’re also examining the altercation between Khan and his spies. Initial reports said that the executive was followed by several people who tried to take his mobile phone after he took pictures of them. But the company conducting the surveillance has said only one employee was shadowing Khan, acting defensively throughout.

Will Bouee receive any severance?

Rohner said at a press conference yesterday that Bouee will receive only the severance he’s legally entitled to, but he left open how much that was. His compensation “will be determined by the compensation committee,” the chairman said. “That will be discussed in due time. We will follow the normal process.” Getting additional compensation was already impossible under Swiss law, he added.

To contact the reporter on this story: Patrick Winters in Zurich at pwinters3@bloomberg.net

To contact the editors responsible for this story: Dale Crofts at dcrofts@bloomberg.net, Christian Baumgaertel, Ross Larsen

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