Credit Suisse is no more. On March 19, 2023, after a slump in shares and bonds, it was announced that the 167-year-old Swiss bank would be sold to its competitor UBS.
Many blamed Credit Suisse’s collapse on a loss of investor confidence due the recent failures of Silicon Valley Bank and Signature Bank in the US. But Credit Suisse was well-known to be a problematic institution. They have had a consistent stream of financial mishaps and scandals for more than 15 years, resulting in catastrophic losses.
In April of 2021, Credit Suisse reported a $4.7 billion loss linked to services provided to the hedge fund, Archegos Capital Management. The founder of the fund, Bill Hwang, was arrested for charges of fraud and racketeering. At least seven Credit Suisse executives were forced to resign, among them Lara Warner, the group’s Chief Risk and Compliance Officer.
In February of 2022, the records of 30,000 Credit Suisse customers were leaked to Süddeutsche Zeitung, a German newspaper, showing that many of their accountholders were guilty of human rights atrocities. There were torturers, human traffickers, and corrupt politicians from every major continent. The list of names was a veritable who’s who of some of the world’s most horrific criminals. It included notorious Philippines dictator Ferdinand Marcos and his wife Imelda, along with Sa’ad Khair, a Jordanian spy chief known for overseeing torture operations.
Credit Suisse tried to turn their reputation around in June of 2022, when CEO Thomas Gottstein held a Deep Dive event hoping to showcase the overhaul of their risk management team. He claimed that they were making better investments and cleaning up the toxic culture within the institution. But toxicity, and indeed criminality, were an inherent part of their operations. In fact, it was announced that same month that the bank was found guilty of aiding in a money laundering scheme involving a Bulgarian drug cartel.
There is one scandal that seems to have escaped the public eye. Very little has been said about Shan Li, a member of the Board of Directors at Credit Suisse. Li co-founded the pro-Beijing political party Bauhinia, hoping to gain seats in Hong Kong’s Legislative Council.
The party was formed in opposition to a pro-democracy movement in Hong Kong, which began in 2019. The city’s residents showed out in force—sometimes in crowds of well over a million—successfully stalling a bill that would allow China to extradite “criminals” to the mainland. Afterwards, they organized pop-up rallies throughout the city. They clashed with security forces in the streets, and stormed their government headquarters, the Legislative Council Complex. They were hoping to wrestle control of Hong Kong’s politics away from the mainland.
Beijing responded by destroying all pretense of freedom and nullifying Hong Kong’s basic civil rights. On June 30, 2020, the Chinese People’s Congress passed the National Security Law, giving them widespread powers to prosecute speech and assembly, among other things. The law has since been used to arrest more than 10,000 Hong Kong protesters, including local democratic politicians and dissidents. In March of 2021, the Chinese government declared that only “patriots” would be allowed to serve in the city’s leadership positions. Beijing would pre-approve all of their candidates before the residents would be allowed to vote on them, effectively dissolving the city’s democratic process.
Credit Suisse board member, Shan Li, believed that his party, Bauhinia, could thrive under this new political environment. When asked about the mainland’s intervention into the city’s affairs, Li said, “If Hong Kong is doing well, then Beijing has no reason to intervene.”
Bauhinia was founded by a group of mainland business executives with ties to financial institutions in Hong Kong. The establishment of the party was not made public until December of 2020, when co-founder Charles Wong was interviewed by the South China Morning Post, which openly touted Bauhinia’s pro-Beijing views. It infuriated many residents of Hong Kong, who at the time were still fighting their losing battle.
In relations with the media, Li and Wong would frequently mirror rhetoric used by Hong Kong’s turncoat head of state, Chief Executive Carrie Lam—even to the point where they would repeat the same sentences, a clear sign that they had been given talking points by Beijing. It was all about “building relationships” and “bridging the divide.” They hoped to promote mainland Chinese culture, and they even said that more people in Hong Kong should learn Mandarin. They were also troubled by the demonstrations, which they labeled as violent. They wanted peace and unity instead.
In an interview with The New York Times, Li stated, “You cannot have a protest every day.” It was his way of trivializing the pro-Democracy movement, making it seem silly and deconstructive. He claimed that it was a product of poor economic conditions and wayward youth with nothing better to do. He was unconcerned with the loss of basic rights. He was firmly rooted in his own personal narrative, and he was not about to acknowledge anything else. Instead, Li showed off pictures of his visit to Chinese President Xi Jin Ping’s village, where he hoped to study the Great Leader’s economic philosophy.
The reason Li was able to fly under the radar was because of Credit Suisse’s policy of hiding its business practices, a paramount of the Swiss banking system. When asked about Li’s efforts to undermine democracy in Hong Kong, Credit Suisse refused to respond. When Bauhinia’s formation was made public, they refused to even confirm that he was still on the Board of Directors. We now know that he was, which means that he had a firm foothold in the world of Western finance, along with executive access to an institution that could act without public oversight.
Fortunately, Li’s tenure with Credit Suisse is at an end. The Board of Directors is gone, and Bauhinia has yet to gain a single seat on Hong Kong’s Legislative Council. But the fact that he was able to gain such a position and maintain it for so long is quite alarming. Li had deep contacts with the Chinese government and banking institutions worldwide. He wanted to end democracy, taking away freedom from millions, and Credit Suisse was doing business with major political players—dirty politicians, intelligence chiefs, dictators—movers and shakers. Li could have easily used those connections and Credit Suisse’s policy of secrecy to further his goal of undermining human rights. Maybe he already has.