Ex UBS boss questions bank's strategy
In a letter published on Friday, former UBS head casts doubt on the bank’s reorganisation plans and choice of new chairman.4 April 2008
ZURICH - A former UBS boss and current chairman of investment company Olivant cast doubt in a letter published Friday on the bank's reorganisation plans and its choice of new chairman.
Luqman Arnold, joint founder of Olivant Limited, wrote asking for a meeting with UBS executives after the bank announced chairman Marcel Ospel was to stand down and be replaced by UBS lawyer Peter Kurer.
The UBS move was part of a shake up as losses continued to accumulate from the subprime crisis in the US, rising from CHF 19 billion (USD 19 billion) at the end of 2007 to almost CHF 40 billion (USD 40 billion) at the end of the first quarter in 2008.
In a letter to Sergio Marchionne, the only non-executive member of UBS chairman's office Arnold asked if the appointment of Kurer was "the best possible solution at this time". He stated: "It (the move) perpetuates UBS's ineffective corporate governance and insular culture."
He also said: "The quality of balance sheet and risk disclosure still requires further improvement." Plans announced to raise CHF 15 billion in a rights issue might not "achieve finality" while shareholders might not welcome an additional rights issue.
UBS was unique among European banks on the scale of its trading losses which, according to Arnold, were a "shock" given the bank's "historic reputation".
Olivant, which owns 7 percent of the bank's ordinary undiluted share capital, was proposing an alternative strategy "to set out a clear programme for rebuilding UBS' shareholder value and reputation".
The letter is bound to cause shockwaves ahead of the AGM on 23 April when UBS was hoping to get its proposals passed.
[dpa / Expatica]