Credit Suisse has high hopes for its business in China, but the plans may be hampered by a court case, according to reports in the media.
Switzerland’s second-largest bank in April announced that it planned to increase the stake in Credit Suisse Founder Securities to 51 percent from a current third. The company is a joint venture of the Zurich-based bank with China’s Founder Group.
The plan, however, may meet new hurdles, according to a report by the «Financial Times» (behind paywall). Beijing University alleges that three investors have acted fraudulently in acquiring a majority in Founder Group. At the time, the university sold 65 percent of the company. It retained a minority stake.
Strategic Importance
The case may jeopardize the agreement between the Swiss bank and Founder Group about a purchase of additional shares in Founder Securities, the newspaper said. Credit Suisse is putting high strategic importance on its business in China, with Chief Executive Tidjane Thiam expecting strong growth in Asian markets in years to come.
Credit Suisse is one of a string of banks set to profit from the opening of the Chinese financial market. Until late last year, foreign banks had not been allowed to own a majority of a Chinese securities firm. UBS was the first among the foreign banks to make use of the rule change, taking a majority stake of 51 percent in its local unit.
