The staid world of Swiss banking has been rocked by lurid details of the breakdown in the relationship between Credit Suisse chief executive Tidjane Thiam and Iqbal Khan, who ran the bank’s wealth management division.
Swiss prosecutors are investigating an alleged physical confrontation last week between Mr Khan and up to three men hired by Credit Suisse to follow him after he resigned in July to move to arch-rival UBS.
While Credit Suisse has admitted it hired the spy firm, Investigo, each side disputes the other’s version of events.
Mr Khan alleges a group of three men chased him and his wife through the streets of Zurich by car and on foot, which culminated in a physical confrontation behind the Swiss National Bank.
However, an Investigo detective has provided a sworn statement to Credit Suisse and authorities that he was alone, rather than in a group of three, and that Mr Khan chased him, rather than the other way around. Investigo was asked to follow Mr Khan only on weekdays from a suitable distance and identify any people he met, according to documents seen by the FT.
The controversy has shown no signs of ending. It has raised new questions about longstanding personal animosity between Mr Thiam and Mr Khan — and whether the bank acted appropriately in hiring investigators.
“The board is coming under pressure to sort this out and the regulator too,” one major investor told the FT. “It’s something of extreme gravity; in Zurich it is becoming a time bomb and you can feel the panic. Both sides have been damaged, but especially Credit Suisse.”
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“We have said to the chairman and board they have to provide a clear outcome and explanation; whoever did wrong has to pay,” he said.
Mr Khan, who was born in Pakistan and immigrated to Switzerland aged 12, joined Credit Suisse in 2013 after a 12-year career as an auditor at EY. During his tenure, profit at the international wealth management unit increased by around 80 per cent. He helped bring in more than $46bn of net new assets between 2016 and 2018.
French-ivorian Mr Thiam, 57, joined Credit Suisse in March 2015 after running UK insurer Prudential for six years. He quickly set about shrinking the trading arm of the investment bank and repositioning the organisation as a wealth manager focused on ultra-rich entrepreneurs.
Whilst earning plaudits for establishing Credit Suisse as one of the top private banks in Asia, reducing the volatility of earnings and avoiding major scandals — until now — the share price has dropped more than 40 per cent under his leadership.
At first, the pair worked well together, according to people familiar with their relationship. Mr Khan was repeatedly promoted and called a “star” by Mr Thiam. But over time, Mr Khan grew frustrated with his profile within the bank, lack of public appearances, and assurances about his potential to rise to lead the organisation.
