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Swiss police raided Credit Suisse offices and seized documents relating to the collapse of its $ 10 billion line of funds linked to Greensill Capital.
Police searches were carried out at the request of the Zurich cantonal prosecutor earlier this week.
The prosecutor has opened a criminal investigation into Greensill’s activities and how the Credit Suisse funds that financed the British firm’s disputed loan programs were managed and marketed, according to two people familiar with the investigation.
Credit Suisse has confirmed that its offices have been raided, but said the bank itself is currently not a party to the investigation.
“During an official procedure which is not directed against Credit Suisse, data was collected. Credit Suisse is fully cooperating with the authorities and will not make any further statement on this at this time, as this is an ongoing investigation, ”the bank said in a statement.
The Zurich prosecutor’s office did not respond to a request for comment.
News of the raids and the investigation was first reported by the Swiss channel NZZ am Sonntag.
The investigation was opened following a complaint from the Swiss government.
The State Secretariat for Economic Affairs in Bern submitted a case to the Zurich public prosecutor alleging potential violations of federal law on unfair competition.
The complaint is directed against “unknown persons”, which means that the prosecutor’s investigations can be broadened at any time to include institutions or individuals who have not yet been specifically named.
Credit Suisse’s supply chain finance funds – which included invoices owed to Greensill by the company’s borrowers, bundled into investment products – were marketed to investors as financial products at low risk.
Their implosion was a major embarrassment for the Swiss bank, which introduced them to some of its most prestigious and valuable clients.
While around $ 7 billion has been recovered so far, Credit Suisse told investors that among the funds in circulation, at least $ 2.3 billion will be more difficult to return.
A number of class actions have already been filed by angry investors. Criminal charges brought by Swiss authorities would be a significant boost to their legal efforts, in which questions have been raised about the close relationship between Credit Suisse and Greensill, and the bank’s degree of due diligence.
Greensill’s very aggressive lending practices have not been properly disclosed to investors, lawyers for the funds’ clients have said.
Of particular concern are Greensill and Credit Suisse’s relationship with the sprawling metal-forging empire, GFG Alliance, of Sanjeev Gupta.
The UK’s Serious Fraud Office has also opened an investigation into financial transactions between Gupta and Greensill.
The Financial Times has previously reported the suspicious nature of invoices from Gupta companies in which Credit Suisse funds have invested.
Gupta has not set foot on British soil since the opening of the SFO investigation.
Thousands of UK employees at Liberty Steel – part of the Gupta conglomerate – face an uncertain future as the company’s viability hangs in the balance.
The FT reported on Friday that Gupta spent the past weekend lavishly celebrating his 50th birthday on the Greek island of Mykonos.