PETALING JAYA: A former manager who lost half a million ringgit in bonds invested with Credit Suisse Bank, which went bust recently, says he was not entirely aware of the level of risk involved when he bought the bonds last year.
The 71-year-old investor, who only wanted to be known as “John”, told FMT that he had purchased the bonds through a Malaysian bank.
The bonds were written off when Credit Suisse collapsed in March, after years of scandals, changes in the top management and multi-billion dollar losses.
It was thrown a lifeline by rival banking group UBS Group AG but while shareholders received compensation, the bonds were written off, leaving holders such as John out in the cold.
He said this was a departure from standard procedure where bondholders come ahead of shareholders.
John said the bank customer relationship manager who sold him the bonds told him that it was a low-risk income fund with expected gross annual returns of more than 6%.
He said the bank did not disclose any other information, such as the consequences if Credit Suisse were to collapse. However, he conceded that he also failed to conduct any research prior to purchasing the bonds.
John is now looking to enlist the help of a lawyer to recover his money.
He said that when Credit Suisse began to experience financial difficulties, he contacted two employees of the bank but they only gave him “textbook stereotype explanations”.
However, an employee of the bank, who spoke on condition of anonymity, said John had been regularly updated.
A source attached to the fund house that sold the bonds told FMT that the fund series purchased by John could not be diversified, so investors would lose everything.
Another source said that while the bonds that John purchased were low-risk, they would become “the riskiest bonds” if Credit Suisse defaulted on payments.
Last week, it was reported that Asian investors had joined a series of international lawsuits being filed against the Swiss government over its handling of the takeover of Credit Suisse.