SWITZERLAND - Shareholders of UBS have declined to discharge the Swiss bank's former board members in a close vote, so Ethos has renewed calls for legal action.

Prior to the annual general meeting, which took place yesterday and lasted over eight hours, the Ethos foundation had called on shareholders not to agree to discharge board members of responsibility for the years 2007, 2008 and 2009, because UBS suffered heavy losses over the last years and a highly detrimental tax battle which the former board - especially Marcel Ospel, Peter Kurer, Peter Wuffli and Marcel Rohner - had gotten the UBS into in the US.

"The current board of the UBS has made itself accomplices to former board members by denying to file a civil lawsuit against former board members," Dominique Biedermann, head of Ethos, told shareholders at the AGM.

In the end, 53% of shareholders voted against the discharge for 2007 while 46% supported it, the other discharges were approved by around 80%.

"We are accepting this vote and view it as a vote of resentment," said a seemingly surprised Kaspar Villinger, re-elected chairman of the board of directors at UBS.

That said, he added while the issue will again be discussed by the board, its decision not to file a lawsuit against former board members is standing unless new evidence or analysis comes to light.

"This vote means that shareholders still have the right to make claims regarding former board members within the legal limitation period," argued Villinger.

Ethos was less successful in its call on shareholders to reject UBS' compensation report, which includes bonus payments to existing and former board members. (See earlier IPE story: UBS reports net institutional outflows)

Biedermann claimed at the AGM that UBS had changed its remuneration system without consulting shareholders as promised once again granting non-performance based variable remuneration. (See earlier IPE story: Swiss funds get say on UBS pay)

Villinger admitted there had been "exaggerated payments in the financial industry" in the past but felt those will become fewer. He argued it was important to pay bonuses to be able to hold good staff - a claim which was heatedly criticised by many speakers at the AGM.

Nevertheless, the compensation report was accepted by 55% and the 2009 annual accounts accepted by 98%.

All board members were re-elected by above 90% of shareholders and Wolfgang Mayrhuber, CEO of Lufthansa, was voted into the board with a similar majority.

His appointment had also been opposed by Ethos on the grounds that he is already on the board of directors at four large listed companies - namely BMW, Munich Re, Fraport and Heico Corp.