Oligarch wins Bermuda case, eyes Georgia’s EU ambition
One of the world's leading financial services providers, Credit Suisse Group, says it has lost a Bermuda Supreme Court battle that could cost it half-a-billion dollars.
Credit Suisse Group said it believes the court is about to enter a judgment against it in a long-running case involving a former prime minister of Georgia over hundreds of millions he claimed had disappeared from his accounts.
Although the Georgian oligarch, Bidzina Ivanishvili, appears to have won a huge victory, it may not be foremost on his mind today.
The woman believed to be his surrogate as President of Georgia has taken a decidedly anti-Russian stance and sought Georgia’s urgent membership in the European Union, with concerns that her country might be next on Russia’s invasion hit list.
By doing so, she may have isolated herself from the pro-Russian interests of her government.
Mr Ivanishvili, who remains active in Georgian politics, had chased Credit Suisse Group AG all the way to Bermuda for hundreds of millions of dollars he claimed it lost through fraud.
He claimed the bank treated him worse than in any financial dealing he saw in the wild days of post-Soviet Russia.
Using a translator, Mr Ivanishvili testified via Zoom before Chief Justice Narinder Hargun that he had the worst customer service he had ever seen.
His money was handled by a rogue bank employee, who later admitted to a list of fraud crimes and who eventually committed suicide.
Mr Ivanishvili sued Credit Suisse Life (Bermuda) Ltd for failing to stop its employee Patrice Lescaudron from losing $400 million of his fortune when, he says, clues about the relationship manager’s crimes had become apparent.
Mr Ivanishvili sued the bank’s Bermuda life insurance unit for alleged “breaches of duty”.
Credit Suisse’s brief comment this week stated: “Credit Suisse Group announces that a court in Bermuda is expected to publish shortly a judgment against a local life insurance subsidiary of Credit Suisse AG, Credit Suisse Life Bermuda, potentially totalling in excess of $500 million.
“Credit Suisse has previously taken reserves against this matter and intends to pursue all available legal actions.
“We will consider whether any further reserves are required as part of our first-quarter results due to be published on April 27, 2022.”
Mr Ivanishvili had told the Bermuda court that even when it was clear that the rogue banker was out of control, the institution did not stop him from dealing with the $400-million account.
The five-week-long case included witnesses testifying remotely from several jurisdictions.
Meanwhile, Mr Ivanishvili would be aware that the Georgian Government has this month been engaged in a policy U-turn.
Nightly demonstrations of tens of thousands of Georgians in the capital, Tbilisi, in support of Ukraine, caused the country this month to speed up its application to join the EU.
It is a government led by the Georgian Dream party that Mr Ivanishvili co-founded, a government aligned with Russian interests.
Georgia had officially refused to join international sanctions against Russia and officially refused to do anything to speed up planned membership in the European Union.
But Georgians remember 2008, the year Vladimir Putin led Russian forces in an invasion of their country in which hundreds were killed.
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