Former boss calls for break-up at UBS

UBS is under pressure as its former chief executive is calling for a break-up of the group.

The Swiss banking giant has been the biggest casualty of the credit squeeze.

Luqman Arnold, who runs the UK-based investment fund Olivant, owns 0.7% of UBS and is also seeking an overhaul of corporate governance and risk controls at UBS.

Mr Arnold, who is also the former chief executive of Abbey wants to meet the board to discuss a break-up of the group.

Shares in UBS increased after the news of Mr Arnold’s move emerged, gaining as much as 4.6% on the Zurich stock exchange.

In a letter to UBS deputy chairman Sergio Marchionne, Mr Arnold has demanded a meeting ahead of its annual shareholder meeting, due on April 23. That meeting will be asked to clear an emergency $15m rights issue and to approve the installation of lawyer Peter Kurer as new chairman following Marcel Ospel’s decision to quit last week.

Mr Arnold criticised the bank’s new chairman Peter Kurer and said he lacked proven strategic, risk management and communications skills and questioned whether he was the best possible solution to be elevated to management at this time. Mr Kurer has spent the last 7 years as the bank’s main legal adviser.

UBS’s reputation has been comprehensively destroyed by proprietary trading activities totally divorced from any client business, concluded Mr Arnold.

UBS recently announced it was shed more jobs, particularly at the UBS investment banking headquarters in London’s Broadgate, where hundreds of bankers have already been made redundant.

Olivant was in the running for the bidding war of Northern Rock but pulled out before the proposal deadline.

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