Billionaire defends bonus he paid convicted Credit Suisse banker

Georgian tycoon Bidzina Ivanishvili

Georgian tycoon Bidzina Ivanishvili

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(Sept 7): The billionaire fraud victim suing a Credit Suisse Group AG trust for US$800 million said he’d paid a US$1.5 million bonus to the rogue banker at the heart of the scandal because at the time he’d seemingly been delivering a good performance.

Georgian tycoon Bidzina Ivanishvili told a Singapore court that while transfers to Patrice Lescaudron from 2008 went to private accounts without Credit Suisse’s knowledge, he was too busy to be involved in the logistics of how and where the money was paid.

“Probably he wanted it for his own personal benefit, and he wanted to justify it by calling it something else under some different names,” Ivanishvili said Wednesday. Ivanishvili acknowledged that the arrangement looked strange “as I look at it now,” but “unfortunately, I didn’t pay attention at the time.”

Ivanishvili was responding to questions by Lee Eng Beng, a lawyer for the trust, who sought to demonstrate there was an active and underplayed rapport between the Georgian and his banker crucial to the legal battle over where to lay blame for his huge losses.

Credit Suisse has long argued that it and its overseas units were in the dark about the fraud scheme perpetrated by Lescaudron, which went undetected until the Frenchman’s confession to Geneva prosecutors in 2015. Lescaudron was convicted of fraud in 2018, released from prison late that year and committed suicide in the summer of 2020.

The trial, which comes in the wake of a string of embarrassing scandals that the bank’s new CEO is trying to put behind him, also raises broader questions about the limits of fiduciary responsibility a trust should bear. The Georgian’s lawyers argued on Monday that CS Trust failed in its “basic duty” of keeping his assets safe.

The unit’s counsel countered that its only job was to administer the trust structure, and not to make any investment decisions. If anything, Ivanishvili could have exercised his power to transfer his assets to another bank, said Lee, the lawyer for the trust.

Credit Suisse on Tuesday announced it was selling its trust business including the Singapore unit. The decision was made as part of a regular review, the Zurich-based bank said, making no mention of the Singapore litigation.

The trial resumes on Thursday with some testimony from Ivanishvili, his investment adviser George Bachiashvili before representatives from Credit Suisse Trust take the stand.