Ethos halts court action as UBS gives in
SWITZERLAND - UBS has agreed to publish details of an inquiry into its losses linked to the subprime, revising its earlier position following increased pressure from pension-fund owned Ethos.
Ethos, the asset manager and activist investor representing a number of Swiss pension funds, said the Swiss bank had confirmed in writing "it intends to engage in more transparent communication on the inquiries concerning the impact of the US subprime crisis", following "talks initiated by Ethos".
The organisation will therefore not take its earlier request for a special audit to the courts, it said in a written statement on Friday.
UBS confirmed today it has agreed to provide shareholders with a 30-page summary of the 300 pages of answers it will give following an inquiry by the Swiss Federal Banking Commission (SFBC) into how UBS made write-downs of $18.4bn on its portfolio of securities related of US residential mortgages, or subprime.
UBS said it intends to make an initial summary document available at the ordinary general meeting scheduled for April 23.
Moreover, the bank has agreed to ask an external expert, commissioned together with Ethos, to certify that the document "accurately reflects the original report".
At a later date, at completion of the SFBC inquiry, UBS will also convey to the shareholders a substantial report on SFBC's conclusions, said UBS.
It is unclear why the Swiss bank has revised its position, since it had decided at an extraordinary general meeting at the end of February it would increase its capital without the help of ordinary shareholders, refusing a special audit on subprime losses.
UBS said in a written statement today: "It is correct that UBS and Ethos, after constructive discussions, reached an agreement among themselves regarding the information to shareholders. This will also depend on the approval and approach taken by the FBC, which was not party to the agreement."
The company continues: "UBS has noted with satisfaction that Ethos now intends to forego making a formal request for a special audit via the courts, following the rejection by UBS shareholders of the Ethos proposal for a special audit by a good 55% of the votes present."
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