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Empty Private Jet Flights Hastened Credit Suisse Chairman António Horta-Osório’s Downfall


After relocating to Zurich last spring to run

Credit Suisse Group AG


CS -1.83%

as chairman,

António Horta-Osório

flew to London and Lisbon for work meetings and business events, then spent time with his family at homes there.

On multiple occasions, a private plane paid for by Credit Suisse dropped him off on a Thursday and returned empty to Switzerland, according to people familiar with the travel. By Monday, a plane picked Mr. Horta-Osório up for work in Zurich.

The empty flights were identified in a company review of his travel, which also identified Covid-19 quarantine breaches in Switzerland and the U.K. A person close to Mr. Horta-Osório said the planes were rented, and couldn’t wait around for the weekend. The person added that bank rules on use of aircraft weren’t broken.

The travel review became fodder for Credit Suisse officials who pushed for Mr. Horta-Osório’s departure, and caused his fellow board members to refuse to back him, people familiar with the board said. The bank announced his resignation earlier this week.

Credit Suisse’s Zurich headquarters. The bank was founded by a Swiss entrepreneur in 1856 to promote commerce.



Photo:

ARND WIEGMANN/REUTERS

Mr. Horta-Osório had committed to fix a deeply wounded Credit Suisse. He joined weeks after twin client collapses—Greensill Capital and Archegos Capital Management—rocked the bank. The Portugal-born banker came with a reputation for getting jobs done. He was granted a British knighthood for restructuring

Lloyds Banking Group

PLC after the financial crisis.

In his brief tenure at Credit Suisse, Mr. Horta-Osório guided a broad pullback in risk taking and helped recruit new executives.

He also offended longtime executives with attacks on Credit Suisse’s practices, compensation and litigation strategies, according to people familiar with the bank. Known for his demanding style, some board members received complaints about how Mr. Horta-Osório spoke to staff and about instances when people felt uncomfortable that he sometimes didn’t wear a mask at the bank despite Covid-19-related rules, the people familiar with the board said.

The price paid by Mr. Horta-Osório was leaked information on his plane use and quarantine breaches to the Swiss and international press, which preceded his resignation.

For the board, an all-day sporting spree in July also stood out, the people familiar with the board said. Mr. Horta-Osório and several family members watched

Novak Djokovic

beat

Matteo Berrettini

in the Wimbledon men’s tennis final, then traveled to north London’s Wembley Stadium to see Italy defeat England in the finals of the UEFA European soccer championship.

The tickets had been bought for clients who dropped out last minute, he told the bank, the people familiar with his travel said. The total bill for the day was in the tens of thousands of dollars, according to public ticket prices.

Mr. Horta-Osório wasn’t supposed to be out and about in coronavirus-restricted England when he went to the two events. He had flown into the country mistakenly believing Credit Suisse got him an exemption from a 10-day quarantine, according to the person close to Mr. Horta-Osório.

António Horta-Osório and several family members watched Novak Djokovic beat Matteo Berrettini in the Wimbledon men’s tennis final.



Photo:

Pool/Getty Images

Credit Suisse was founded by a Swiss entrepreneur in 1856 to promote commerce. By the turn of the millennium, it had grown into a force on Wall Street and in fast-growing Asian markets, reaping huge dividends for shareholders.

Then a spate of scandals hit. Civil cases tied to toxic mortgages in the U.S. cost it billions in settlements in recent years. A unit pleaded guilty in the U.S. last year to defrauding investors in a $850 million debt deal for a Mozambique state-owned company.

Another Mr. Fix-it who came via London, former Chief Executive

Tidjane Thiam,

resigned in 2020 after failing to contain reputational fallout from a spying scandal, sparked when a former top executive found out the bank was tailing him.

On his first day, April 30, Mr. Horta-Osório said publicly that the bank’s problems went beyond anything he had experienced at a company.

The words rang out like an insult to bankers, traders and other workers who considered themselves guards of Credit Suisse’s unusual Swiss-American DNA of can-do and discretion, according to current and former bank employees.

Mr. Horta-Osório brought in key lieutenants and rolled out his Lloyds playbook. He set out to explore Credit Suisse’s global footprint and meet staff, clients, investors and regulators in person.

He zipped to New York, Qatar, Singapore and London from his new base in Zurich, with visits too to Spain and Portugal, which haven’t traditionally been big markets for Credit Suisse. He addressed a Portuguese banking conference in Lisbon one day in November, then flew to London to interview a job candidate.

The travel, via private plane, seemed warranted to people around Mr. Horta-Osório because he was building trust and showing commitment.

In late November, the Omicron coronavirus variant flared in the U.K. Switzerland imposed a quarantine on travelers from the country, ensnaring Mr. Horta-Osório on a trip back from London. Through a health adviser working with Credit Suisse, he sought a government waiver so that he could go to the office for meetings, according to the people familiar with his travel. The waiver was refused, and a few days later Mr. Horta-Osório headed to meetings in Madrid, unaware that the Swiss rules didn’t allow for people subject to quarantine to depart.

He only realized his error when details of the trip appeared in Swiss newspaper Blick, the person close to him said.

Former Credit Suisse CEO Tidjane Thiam resigned in 2020 after failing to contain reputational fallout from a spying scandal.



Photo:

fabrice coffrini/Agence France-Presse/Getty Images

Switzerland has a complex social and business rulebook that can be hard for newcomers to crack. A life of wealth and privilege is allowed for those who succeed, but it should never generate headlines or be on display in times of crisis, according to people who have worked at the bank. Also: Follow the rules.

Specific to Credit Suisse, according to the people who worked there, is to behave immaculately within Switzerland, where Credit Suisse is a ubiquitous business and retail bank.

Some in the upper echelons were feeling unsettled by changes pushed by Mr. Horta-Osório.

There were rumblings that

Eric Varvel,

a 31-year veteran of the bank, was leaving. He had been the head of the asset-management unit that ran $10 billion investment funds with Greensill. The funds had to be frozen when Greensill went bankrupt. Credit Suisse is trying to get all the money back for fund investors.

But he was also seen as a legend inside the bank for guarding his house with a bat during riots in Indonesia and for persuading investors in Saudi Arabia and Qatar to pump billions of dollars into Credit Suisse during the 2008 financial crisis, according to people familiar with his career.

Chief Executive

Thomas Gottstein

was the one who told Mr. Varvel he had to go, but it was Mr. Horta-Osório who had made it clear it had to happen, according to people familiar with the bank. Mr. Varvel’s departure was announced Dec. 20.

There was also growing tension with the bank’s general counsel,

Romeo Cerutti,

who had held the top legal posting since 2009, according to people familiar with the tensions. Mr. Horta-Osório viewed the lawyer as damaged since he had been at the bank through a number of crises, some of the people said.

Staff at Credit Suisse assembled pages of Mr. Horta-Osório’s flight logs and expenses and handed them to law firms for the travel review. The information was also shared with Swiss regulators. News of his whereabouts began appearing in the Swiss press. That included having touched down in the Maldives to join his wife on vacation on the way back from a Singapore business trip.

Mr. Horta-Osório left Singapore a day early so that another executive could join him and take the plane back to Zurich, according to the person close to Mr. Horta-Osório.

Credit Suisse’s general counsel, Romeo Cerutti, has had held the top legal post since 2009.



Photo:

Andrew Harrer/Bloomberg News

Just after Christmas, Reuters reported that Credit Suisse found he had breached quarantine while at Wimbledon. Board members who gave Mr. Horta-Osório a pass on the Switzerland incident were disappointed, according to the people familiar with the board.

Severin Schwan,

the lead independent director at Credit Suisse, is the chief executive of

Roche Holding AG

, upping the ante for him to weigh in on the matter as head of a health company. Mr. Schwan helped set the tone for other board members in viewing the breaches as serious, the people familiar with the board said.

Mr. Horta-Osório’s use of the private jet and attendance at the sports events also made some board members uncomfortable. Some felt Mr. Horta-Osório wasn’t fully transparent about his actions, according to the people familiar with the board.

Credit Suisse had a potential successor in the wings. On Jan. 17, the board named a new chairman,

Axel Lehmann,

a Swiss, former

UBS

executive who had joined Credit Suisse’s board in October.

Write to Margot Patrick at margot.patrick@wsj.com and Emily Glazer at emily.glazer@wsj.com

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