GLOBAL - Credit Suisse Group has hit out at speculation over its role in the collapse of energy giant Enron, in a bid to skirt around potential legal action, some of it from US pension funds.
Recent news reports have highlighted the involvement of Credit Suisse bankers in cementing partnerships that may have contributed to the loss of billions of dollars through underperforming assets. Credit Suisse First Boston - the investment banking arm of the Swiss giant - said that all of its structured partnerships were approved by rating agencies, external legal counsel and external auditors, and were disclosed to institutional investors. Any transactions were therefore “absolutely transparent and well documented”, according to the firm, which saw “no justification for any lawsuits”. Giant Enron - one of the 10 largest bluechips in the US - did a great deal of business with a number of investment banks including Merrill Lynch, CitiGroup, Chase and JP Morgan.
Both CSFB and merger partner, Donaldson, Lufkin & Jenrette (DLJ), co-structured and co-underwrote transactions for Enron. These standard structures were judged by rating agencies to be investment grade, insisted the firm.
CSFB added that the structures of these partnerships, as well as the checks, were all disclosed before they were marketed to institutional investors.
The firm also described accusations about the independence of its analysts as “unfounded”, saying that the bank employed strict policies to safeguard against potential conflicts of interest thanks to ‘Chinese walls’ within the bank.
By Madhu Kalia
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