Created: Nov 18, 2021 07:59 AM
The former leader of the Georgian nation said yesterday in a court in Bermuda that during the fall of the Soviet Union he made such a large fortune that he became one of the richest men in the world.
But he implicitly trusted Credit Suisse with a billion dollars of his fortune. He testified that his only involvement in managing the money was checking his account balances.
Bidzina Ivanishvili has occupied the virtual witness bench all day by videoconference before Chief Justice Narinder Hargun, who is hearing the case in commercial courts.
Mr. Ivanishvili and other plaintiffs have brought actions against Credit Suisse Life (Bermuda) over hundreds of millions of dollars in losses incurred from investments in two unit-linked life insurance policies, a type of vehicle that provides for both insurance and investments.
The losses came after Patrice Lescaudron, a dishonest banker at Credit Suisse Group AG, whose clients included Mr Ivanishvili, invested in a company called Raptor Pharmaceutical Corp on behalf of clients.
But he used their money to buy additional stock awards without their permission.
Raptor suffered a drastic drop in value, resulting in losses. Investigations following the Raptor incident revealed that Lescauldron had defrauded customers for ten years and used the proceeds to fund his extravagant lifestyle.
Bloomberg reported that the former Georgian prime minister had invested around $ 755 million in Credit Suisse Life (Bermuda) products. His losses are estimated at around $ 400 million.
Witnessing from a distance and speaking through interpreters, Mr. Ivanishvili was seated at a desk in front of a large window overlooking what appeared to be a small garden.
Responding to questions from Credit Suisse Life (Bermuda) lawyer Stephen Moverley Smith, QC, the former billionaire executive – who after the fall of the Soviet Union once owned a Russian bank called Rossiysky Kredit – said: âI had worked in Russia and had worked in Georgia. In all my experience working in banks, I had never seen anything like what happened at Credit Suisse.â
He described it as “so shocking”.
Claiming that he swears by “all that is dear to me – my four children,” he testified that he had never encountered what he described as “the wildest capitalism that has been breaking up. of the Soviet Union. I have never seen the customer treated so badly anywhere else.
“It was a shock on a scale that changed my view of the world.”
Mr. Moverley Smith questioned Mr. Ivanishvili at length about his involvement in the management of investments held by Credit Suisse Group and Credit Suisse Life (Bermuda).
The lawyer explained to Mr Ivanishvili his progress as a client of Credit Suisse, asking him about his knowledge and involvement in the investments and the vehicles in which the investments were held.
The former chief insisted he was only interested in capital maintenance and account balances. He told the court that the only requirement he expressed to Credit Suisse was that the money be kept in a safe place.
âThe bank was telling us that if you want to keep your money safe, you have to do this, this and that, and sign this and that.â
Mr Ivanishvili said: âWe came to a trustworthy bank. We had so much confidence in them that we just said, âWhere do we sign? “”
He added: âEveryone and their dog have heard of the Swiss banking system and UBS. Everyone with $ 100,000 will only go to Switzerland because of their name. We were reluctant to ask questions because it would be embarrassing, because of the reputation of the people we were dealing with.
Mr Moverley Smith asked the former Prime Minister if this is the way business is done in Russia.
Mr. Ivanishvili replied: âDue to the break-up of the Soviet Union, the environment was very unstable. One could not trust Russia’s singular approach. The idea of ââreliability – I might have had a similar attitude towards a German or French bank. But the Swiss have the best name even today.
The case continues this morning.
Bidzina Ivanishvili, the former Georgian prime minister who lost $ 400 million at the hands of a rogue banker