Swiss Life scandal claims another victim
The Swiss Life scandal over secretive management perks has claimed another victim. On Thursday the chairman of the board, Andres Leuenberger, said he would step down in 2003.
On Wednesday, the troubled insurer appointed banker, Rolf Dörig, as its new CEO, after ousting Roland Chlapowski.
The scandal has also claimed the scalp of a political party boss, who is on the board of Swiss Life.
Leuenberger announced his departure at a manager’s meeting on Thursday night. Swiss Life said in a statement that the company’s board would be “rejuvenated and reinforced” at the 2003 shareholders’ meeting in May.
In an interview with Friday’s “Tages-Anzeiger” newspaper, Leuenberger signalled that further boardroom changes were pending.
He said that at least three or four “highly-qualified” specialists would be brought in, but gave no clues as to the identities of those likely to be replaced.
News of Leuenberger’s planned departure came just hours after Switzerland’s insurance regulator extended its investigation into the country’s biggest life insurer.
The shake-up at Swiss Life is being seen as an attempt to restore the confidence of investors and customers, following the scandal surrounding a secretive investment vehicle for top managers and recent accounting errors.
It comes ahead of next week’s crucial capital increase of between SFr900 million and SFr1.2 billion ($816 million).
Capital increase
Swiss Life revealed last week that six top managers – including Chlapowski – made a combined profit of SFr11.5 million ($7.8 million) by investing their own money in Long Term Strategy AG (LTS), a three-year-old company with close ties to the insurer.
Chlapowski personally enjoyed a return of SFr3.2 million on an investment of SFr967,000
The existence of LTS had reportedly been kept secret not only from regulators and shareholders, but also from some other members of the board.
The resignations of Leuenberger and Chlapowski follow heavy media speculation that a handful of top Swiss Life bosses would leave the company,
Chlapowski is the second CEO in nine months to have been shown the door by Swiss Life. The previous incumbent Manfred Zobl left the company in February.
The scandal also cost Gerold Bührer his job as president of the Radical party. He is not directly implicated in the LTS scandal, but sits on the board of Swiss Life.
Loss of confidence
Last weekend the Swiss economics minister, Pascal Couchepin, added his voice to the criticism of top managers who enrich themselves at shareholders’ expense, in a newspaper interview with the “SonntagsBlick”.
Although he did not mention anyone by name, Couchepin’s comments – describing “greedy bosses” as a “disgrace” – appeared shortly after Swiss Life admitted its top managers had made fat profits out of LTS.
LTS’s activities were terminated after Leuenberger ordered its dissolution earlier this year.
Leuenberger said he had known about LTS since 2000 but had not invested in the company. He explained that he had only acted after the insurer’s own financial problems became apparent.
Investigation
There was further bad news for the troubled insurer on Thursday when the Federal Office of Private Insurance signalled it was creating an additional team of six experts to investigate Swiss Life’s financing of LTS.
The insurance regulator had already launched an inquiry into the legality of LTS’s structure and activites.
Federal investigators are also probing two accounting errors at Swiss Life, which wiped more than SFr450 million off the insurer’s bottom line.
Chlapowski and Leuenberger have been summoned to Bern to give further explanations about the investment vehicle.
Swiss Life has sought to play down the impact of the probes ahead of next week’s planned capital increase.
“This does not influence our plans,” said a spokesman.
swissinfo with agencies
Andres Leuenberger will step down as chairman of the board at next year’s general meeting in May.
CEO Chlapowski is being replaced by Credit Suisse’s Rolf Dörig.
Swiss Life is being investigated by Zurich district prosecutors and the Federal Office of Private Insurers.
The scandal also claimed the scalp of Radical party boss, Gerold Bührer, who remains a Swiss Life board member.
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