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Blocher proves slow to sell his shares

Christoph Blocher seems to find it hard to sever links with his firm Keystone

The billionaire, Christoph Blocher, seems in no hurry to divest himself of his business interests, now that he has been elected to the cabinet.

This content was published on December 17, 2003 - 21:02

Critics complain that although he has stepped down from the helm of EMS Chemie, he has yet to sell his majority shareholding, which could lead to a conflict of interest.

After being elected to the cabinet on December 10, Blocher said he would be handing over operational control to his daughter, Magdalena Martullo-Blocher, when he starts his term as justice minister on January 1, 2004.

But he has yet to reveal when he intends to unload some of his 72 per cent shareholding in the company, which has a market capitalisation of SFr2 billion. Blocher has promised he will sever links with his firm, but has been vague about precisely when and how.

“Legally he has no obligation to get rid of his shares,” says Walter Haller, professor of law at Zurich university. “But he should find a solution that does not call his credibility into question.”

One alternative would be to hand over the shares to his children, but this would involve a hefty tax bill.

To avoid high taxes, the Blocher family could shift their headquarters overseas, but such a move would hardly be appropriate for a minister in government. “I’m sure that Blocher, who always emphasised Swiss values, will not advocate such a solution,” says Haller.

Another possibility is to set up a trust and transfer ownership – something Blocher says he is looking into.

Blocher’s shareholding is seen as a potential conflict of interest because his decisions as a minister could affect the share price of his firm.

“As a member of the federal government, Blocher could at least theoretically use his inside information to influence the prospects of his enterprise,” Haller told swissinfo. “Although the danger is not so great as he will now become minister of justice.”

The collapse of the national airline, Swissair, two years ago demonstrated how conflicts of interests can arise. Ministers were faced with the choice of using taxpayers’ money to rescue Swissair or letting the airline go under.

Abandoned

In the event, they abandoned Swissair, but softened its collapse with a bridging credit. The economics minister at the time, Pascal Couchepin (now interior minister), admitted to losing SFr150,000 when Swissair went under.

“Two years ago, certain public officials lost money with the collapse of Swissair,” Hansruedi Moser, spokesman for the Federal Chancellery, told swissinfo.

It is perfectly legal for ministers to hold shares in firms, but they are prohibited from being board members or taking an active role in the running of a company. Blocher has control of EMS Chemie with his 72 per cent holding.

When Kaspar Villiger (who has just resigned as finance minister) joined the cabinet in 1989, he immediately sold off his shares in the family bicycle firm, Villiger, to his brother Heinrich.

“We have no idea what he actually did with his millions,” says Moser at the Federal Chancellery.

Declare interests

Swiss law states that ministers must declare their interests in private companies. But it does not specify the nature or size the shareholding. “In cases of doubt, ministers must inform their cabinet colleagues, and a joint decision must be taken,” says Thomas Sägesser, head of legal services at the Federal Chancellery.

He added that such a decision would specify how much of the holding would have to be sold to avoid a possible conflict of interest.

Political analyst, Iwan Rickenbacker, believes Blocher should sever links with his firm as soon as possible. He says Blocher must demonstrate that he supports the cabinet’s “collegiality” principle of joint decision-making, as well as his trustworthiness.

For Peter Ulrich, a professor of business at St Gallen university, it is clear that even if Blocher separates himself from his business interests, he will continue to think like an investor.

But he too believes that it is incumbent on Blocher to take seriously his responsibilities as a cabinet minister.

Public duties

“The Swiss… expect Blocher to identify with his post as cabinet minister, and to take his public duties seriously. They don’t want someone who has half an eye on his private interests.”

Ulrich says that, as a minister, Blocher will have to be careful not be seen as looking at the country from a position of privilege. “He must do his best to put the interests of the population as a whole first.”

He adds that Blocher has the potential to succeed as a minister. “But he needs to radically rethink his ideas and his way of looking at the world.”

swissinfo

Key facts

Christoph Blocher, 63, has run EMS Chemie for 20 years.
He holds 72 per cent of the company’s shares, worth more than SFr1.8 billion.
Blocher is to hand operational control of the firm to his daughter in January.
But it remains unclear when he will sever his links with the firm.

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In brief

Swiss law prohibits cabinet ministers from being a board member or director of a company.

Ministers can hold shares but must declare their interests, and may be told to sell some shareholdings to avoid potential conflicts of interest.

Similar rules apply in Germany.

In France, government members must declare all business interests.

There are no laws in Italy to prevent potential conflicts of interest in government.

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