There were a number of high-profile governance, risk and compliance cases in 2018.
Swiss Post and Postauto AG
A major case is the suspected subsidies and accounting fraud at the government-owned enterprise Swiss Post and its subsidiary Postauto AG.
In February 2018, the Federal Office of Transport filed a criminal complaint against Postauto AG for alleged subsidies fraud and false accounting. The Federal Office of the Police (Fedpol) initiated an investigation for possible violations of administrative criminal law, fraud and document fraud, as well as disloyal management committed by various bodies of Postauto AG.
It was alleged that Postauto AG had, for many years, transferred profits from subsidised businesses to non-subsidised businesses in order to keep its entitlement to federal and cantonal subsidies.
An internal investigation report brought serious organisational deficiencies to light. Subsequently, the board of directors of Swiss Post dismissed the entire executive board of Postauto AG and most executive managers of Swiss Post. Swiss Post subsequently refunded about 205 million Swiss francs to the Swiss government and Swiss cantons.
In 2018, the OAG opened criminal proceedings against an employee of the federal defence group RUAG. The OAG is investigating possible violations of the War Materials Act which prohibits the sale of certain weapons to a number of countries, such as Russia. In the context of this investigation, the OAG conducted a dawn raid at RUAG’s offices in Berne. Ruag self-reported the matter to the OAG.
In October 2017, FINMA had opened an investigation into Raiffeisen bank group and its former chief executive officer for suspected conflicts of interest. The investigation was concluded in June 2018. FINMA found that the bank had insufficiently managed conflict of interests. Additionally, the board of directors of the bank neglected the supervision of the former chief executive and thus at least potentially enabled him to achieve financial advantages to the detriment of Raiffeisen.
FINMA assessed the measures taken by Raiffeisen in the meantime to improve its corporate governance and ordered further measures to restore proper and diligent management. A later internal investigation confirmed FINMA’s regulatory assessment.
The bank is currently assessing whether to claim damages from former board members and executive directors, in particular the former chief executive.
OAG’s investigation into the Malaysian sovereign fund 1MDB that was opened in August 2015 was still ongoing in 2018. Meanwhile, the OAG is investigating two former officials and unknown persons based on the suspicion of bribing foreign public officials (article 322-septies SCC), misconduct in public office (article 314 SCC), money laundering (article 305-bis SCC) and criminal mismanagement (article 158 SCC).
The two former officials had been in charge of an Abu Dhabi sovereign wealth fund and two former employees of Petrosaudi, a Geneva-based oil company which is linked to 1MDB via a joint-venture.
The OAG is closely coordinating its investigations with the Malaysian authorities, which are (now) supporting the Swiss investigation.
Odebrecht SA and Braskem
Further to the substantial number of Petrobras/Lava Jato-related investigations, the OAG convicted Brazilian company Odebrecht SA and its subsidiary Braskem in December 2016 for organisational failure to prevent the bribery of foreign officials and money laundering under article 102(2) SCC.
The OAG stated that Odebrecht SA had created slush funds throughout the world to pay bribes to government officials, representatives and political parties in a bid to obtain business and projects from state-owned companies. As a result, Odebrecht SA was fined 4.5 million Swiss francs and was obliged to disgorge profits of more than 200 million Swiss francs. A number of banks have been affected by the Petrobras/Lava Jato investigations and filed suspicious-activity reports. This led to follow-up investigations in 2017 against individuals, such as a banker in Brazil.
The OAG’s taskforce has seized about 1 billion Swiss francs in more than 1,000 bank accounts and is currently dealing with more than 50 requests for mutual legal assistance as a result of the publicity following the conviction of Odebrecht SA.
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