A stormy meeting of shareholders of Switzerland's largest bank, UBS, decided on Wednesday against a special audit of the accounts for last year.This content was published on February 27, 2008 - 15:03
The Ethos investment foundation - one of UBS' chief critics – claimed it was necessary because UBS had failed in its responsibility to investors.
The move was turned down at the meeting in the northern city of Basel by 363,771,934 votes to 314,065,169.
UBS chairman Marcel Ospel had argued the bank was already cooperating with the Swiss Federal Banking Commission on a thorough probe.
The meeting was earlier interrupted when a critic of Ospel tried to go to the podium.
The man who caused a security alert was Thomas Minder, the Swiss entrepreneur behind a people's initiative to reduce what he considers are exorbitant salaries paid to some executives, including Ospel.
The embattled chairman left the extraordinary meeting of shareholders in Basel for a while before the marathon session continued. Security officials had prevented Minder from climbing onto the stage.
Earlier, Ospel had urged shareholders to approve a recapitalisation deal worth SFr13 billion ($12.17 billion).
Increasingly under fire as a result of the bank's losses in the United States subprime mortgage crisis, Ospel said the deal was vital for the future of UBS.
"Today we need your backing for a massive strengthening of our capital base," Ospel said.
"We believe that this measures is absolutely necessary," he added.
Ospel described the current financial crisis as possibly the most difficult since the stock market crash of 1929.
The capital injection is planned from Singapore (SFr11 million) with the remainder coming from an unnamed Middle East investor.
Ospel has survived at the helm of the bank despite it running up $18 billion in charges following the subprime crisis.
Despite facing calls for his resignation, Ospel said he would not "thoughtlessly relinquish" his responsibilities.
"Road to success"
"I intend to ensure that UBS gets back on the road to success," he said.
Ospel also said UBS would redouble efforts to cut its exposure to mortgage-backed securities and derivatives.
Ospel attacked those who suggested the bank had withheld information about its exposure to risky mortgage-backed investments. "That charge is nonsense," he said.
"We have always provided information as soon as possible and as completely as possible, and we will continue to do so going forward."
The company said earlier this month that its direct subprime-related exposure stood at US$27.6 billion at the end of 2007.
UBS also is facing a lawsuit from Germany's HSH Nordbank, which said on Tuesday it was suing the Swiss bank for US$275 million in damages over losses stemming from mortgage securities that had turned sour.
The company accused UBS of fraudulent actions related to US$500 million in
collateralised debt obligations.
UBS has denied all allegations and says it intends to defend itself vigorously.
swissinfo with agencies
UBS endured a tough 2007, starting with the collapse of its hedge fund Dillon Read Capital management. Two months after that, in July, chief executive Peter Wuffli abruptly departed without clear explanation.
In October of last year, UBS said it would cut 1,500 jobs in its investment banking arm, including its head Huw Jenkins. UBS chief financial officer, Clive Standish, also left at the same time.
Later that month the bank announced it was writing off SFr4.2 billion on subprime losses and SFr726 million pre-tax loss for the third quarter – the first quarterly loss in nine years.
In December UBS said another $10 billion would be written off as the US subprime crisis deepened.
A further $4 billion was written off in January, bringing the total losses to around SFr20 billion.
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