Skip navigation

Current DateTime: 07:00:56 21 Aug 2008
LinksList Documentid: 24355697

Current DateTime: 01:00:50 21 Aug 2008
LinksList Documentid: 24890560
  • Business of the Olympics

      Bound to be a geopolitical and economic event for the ages, the Beijing Olympic Games highlight China's rise to the fore of the global economy.

  • Texas is Tops in 2008

      Texas knocked out last year's top state for business, Virginia. How did your state fare in our annual study?

  • Powering the Planet

      Energy has become the most common denominator in the global economy. Ultimately, it may be the great unifier. After all, imagine a world without energy, affordable energy.

UBS Revamps Board, Writedown Fears Remain
By Reuters | 01 Jul 2008 | 01:28 PM ET
Font size:

UBS failed to calm investor fears about possible further writedowns on Tuesday, dishing out instead a restructuring of top management and sending the shares to a fresh 10-year low.

UBS, Europe's biggest casualty of the credit crisis and under fire from investors for shoddy corporate governance, said it would dismantle the office of chairman, a key demand of one of its top shareholders, Olivant.

UBS stock -- also under pressure after Merrill Lynch removed it from a list of preferred stocks -- fell 5.3 percent to 20.30 francs, extending Monday's losses below the 21-franc price on its $15.5 billion deeply discounted rights issue.

Investors are worried not only possible about further losses on investments but also that UBS may ask shareholders for more cash.

"There is talk that UBS will propose another capital hike," one Zurich-based trader said.

UBS is under pressure from the Swiss financial watchdog and investors to overhaul its business after more than $37 billion in writedowns during the global credit turmoil.

"Apparently, UBS blames its corporate governance -- with a chairman who also had executive power and no real supervisory function -- for its subprime debacle," said Landsbanki Kepler analyst Dirk Becker.

"With its new governance, it wants to ensure that such an accident can never happen again. However, as this won't help to get it out of the current crisis, we regard this announcement as a nonevent," Becker said.

More Overseeing

Recommendations of a governance committee -- including strengthening the board's overseeing role and a clear separation of the responsibilities of the board of directors and executive management -- would be implemented immediately, UBS said.

Olivant, which had criticised the chairman's office for having too much sway over executive management, welcomed the changes.

Four board members will resign and replacements will be elected at an extraordinary general meeting planned for October 2, UBS said.

Sergio Marchionne, chief executive of Italian automaker Fiat SpA, will fill a new post as senior independent director, and continue as non-executive vice-chairman of UBS.

The board and its strategy committee are continuing their review of the strategic positioning of the bank and its businesses, UBS [UBS  Loading...      ()   ] said.

Copyright 2008 Reuters. Click for restrictions.

HOME  |  NEWS  |  MARKETS  |  EARNINGS  |  INVESTING  |  VIDEO  |  CNBC TV  |  CNBC PLUS  |  CNBC HD+
About CNBC   |   Site Map   |   Privacy Policy   |   Terms of Service   |   Advertise   |   Help   |   Feedback   |   Video Reprints
  Data is a real-time snapshot   *Data is delayed at least 15 minutes

Global Business and Financial News, Stock Quotes, and Market Data and Analysis