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SAirGroup dominates another week in Swiss business

Moritz Suter's sudden departure on Wednesday was followed by the resignation of the entire board

(Keystone)

The SAirGroup, which controls Swissair and Crossair, once more dominated the headlines this week, following the resignation of the board on Friday and the head of its airline division, Moritz Suter, after only 44 days in the job.

Shortly after the Zurich stock market closed on Friday, SAirGroup announced its board would be stepping down in two phases over the next year.

Five board members will leave next month - and the rest, with one exception, will make way for replacements in one year's time. The company said it was part of a change of direction and a review of its alliances.

The announcement capped two months of turbulence which have seen the Swissair chief executive and the group's head of its French airline division, leaving the company. On Wednesday, in a further blow to the group, Moritz Suter - who was brought in just six weeks ago - also announced his resignation as head of the group's airline division.

Suter said he was going because he felt unable to reorganise the aviation unit within the SAirGroup's management structure.

In other news, Swiss business shrugged off voters' rejection last Sunday of an initiative calling for immediate membership talks with the European Union. The consensus among business pundits was that the outcome would not have an adverse effect on the country's economy.

On the results front, good news came from Europe's biggest biotechnology group, the Swiss-based Serono. It revealed on Tuesday that it net profits had risen 64.2 per cent last year to $301 million (SFr498 million), exceeding analysts' expectations.

News of job losses came from the Swiss insurance to banking concern, Zurich Financial Services. It announced late Tuesday that it planned to shed 230 jobs at its Zurich headquarters over the next two years and reduce the number of full-time positions from 1,110 to 500.

More redundancies are expected at Swisscom. Up to 240 employees at the company's logistics units risk losing their jobs, following the company's decision on Thursday to outsource their functions. Swisscom said a decision about their future would not be made until October.

In the banking sector, Credit Suisse made a splash in Asia as one scandal closed in Japan and another erupted in India.

A report on Wednesday in India's Financial Express newspaper said that the Reserve Bank of India would be investigating Credit Suisse First Boston (CSFB) India for alleged insider trading. CSFB denied any knowledge of the investigation, and refuted the allegations.

In a separate case, a subsidiary of Credit Suisse was found guilty by a Japanese court of obstructing an investigation into allegations that the bank helped clients to conceal losses. It was the first time a foreign bank has been found guilty of criminal charges in Japan.

A district court in Tokyo on Thursday fined Credit Suisse Financial Products 40 million yen (SFr555,000).

Back in Switzerland the United States coffee company, Starbucks, opened its first café in continental Europe on Thursday. The American-style coffee shop is located in the very centre of Zurich and follows hot on the heels of a similar venture launched by the McDonalds owned Aroma chain late last year.

Economic news was mixed. Latest figures showed that the Swiss economy grew by the strongest level seen in 10 years despite a slowdown in the fourth quarter.

Gross domestic product (GDP) increased by an annualised rate of 2.5 per cent in the fourth quarter of 2000, according to government data released on Thursday. That compares to an increase in GDP of 3.6 per cent year-on-year in the third quarter.

However, the figures released by the State Secretariat for Economic Affairs showed that full year economic growth for 2000 accelerated to a 10 year-high, up 3.4 per cent from a 1.5 per cent increase in 1999.

On Friday, unemployment data for February showed that the jobless rate had fallen to less than two per cent, after a slight rise in January.

by Michael Hollingdale


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