Mr Bidzina Ivanishvili, the biggest victim of a rogue trader at Credit Suisse Group, is suing one of the bank's trusts in Singapore for at least US$300 million (S$416 million), opening a fresh front in the long-running dispute.
The lawsuit alleges that the Credit Suisse trust "failed to act in good faith and in the best interests of the beneficiaries", namely Mr Ivanishvili and his family, by neglecting to do proper due diligence on how their investments were managed.
Singapore's top court paved the way for the lawsuit earlier this month when it ruled that the city-state had jurisdiction over the case.
Credit Suisse has sought to limit court battles over Patrice Lescaudron, the bank's former star wealth manager, to Geneva where he was convicted in 2018. Lescaudron was sentenced to prison for forging signatures and faking trades to cover mounting losses of clients, including Mr Ivanishvili.
But Mr Ivanishvili, a Georgian billionaire who made his fortune in banking and electronics, as well as Lescaudron's other victims have never accepted that Lescaudron could have kept his fraud alive for nearly a decade without help from inside the bank. In their lawsuit, the lawyers cite the trust's own records showing its Meadowsweet fund as having a value of US$307 million at the end of 2014, but then presentations from the bank showing it having jumped to US$439 million just three months later.
The trust "ought to have become aware that the presentation was wrong" - and had the trust "alerted the plaintiffs to the true investment position of the trust fund and/or bank's misconduct, the plaintiffs would have taken steps to avoid or reduce such losses", Mr Ivanishvili's lawyers said.
Lescaudron's fraud was discovered only in September 2015 when Raptor Pharmaceuticals' shares plunged. The Frenchman had built up a huge position on the stock on behalf of Mr Ivanishvili, without the latter's knowledge. The stock plunge led to the Georgian getting millions of dollars in margin calls and Lescaudron confessing four days later.
The Credit Suisse Trust, a subsidiary of the Zurich-based bank, "intends to vigorously contest and defend the claims on the merits".
BLOOMBERG
