Pension Funds Online

Zurich public prosecutors have announced that they are to charge the former investment head of a major civil service pension fund over a CHF 1.7m (£1.3m) bribery scandal relating to the award of investment mandates.

Accused of repeatedly receiving bribes is one Daniel Gloor, former head of asset allocation at BVK, a fund for civil servants in the Canton of Zurich. According to Pension Funds Online data, BVK holds some €14.6 billion in assets.

Gloor must defend charges of accepting cash gifts of CHF 1.67 million between 2000 and 2010 from companies BVK were working with, mainly investment managers.

He was arrested back in the spring of 2010. Five other people have also been charged in relation to the alleged fraud.

Thomas Leupin, a former CEO and partner of DL Investment Partners is also now awaiting trial on the charge of offering Gloor CHF 300,000 in bribes.

As reported by Pension Funds Insider in April, suspicion had been focused at the way in which DL Investment Partners was awarded a hedge fund mandate from BVK. That DL Investment Partners was founded by three former employees of the consultancy that recommended them to BVK is reported to be a focus of the corruption allegations.

Swiss newspaper Tages Anzeiger reports that Leupin had been denied bail since his arrest in October 2010 due to a perceived danger of him fleeing or suppressing evidence. It has previously been reported in Switzerland that Leupin invited Gloor for free rounds of golf and holidays as well as offering large cash payments.

A former boss of another Swiss investment firm, Lehmann Partners, also faces bribery charges according to the public prosecutors. Adrian Lehmann is accused of having paid Gloor £1.06m francs to secure lucrative mandates for his company. 

Alfred Arthur Castelberg, head of Argus Finanz, is likewise charged with paying Gloor a CHF 180,000 bribe. The head of BT&T Timeline, Walter Meier, is also accused of paying Gloor CHF 121,700 in cash, although the asset management firm immediately released a statement to deny the charges.

Previous reports have suggested that Gloor's possible web of corruption could spread further. The public prosecutors stated that they are continuing to investigate the matter.

Zurich tax authorities indicated on Monday morning that they will file for financial damages should the allegations be proved.

The Cantonal Finanzdirektion released a statement saying it will "closely follow the judgements given to the defendants. As was previously indicated after the arrest of the immediately dismissed head of assets of the Cantonal pension fund, the tax authorities and the BVK pension fund of Zurich Canton will do everything to claim financial damages".

03.10.2011

dbillingham@wilmington.co.uk