Page last updated at 09:28 GMT, Friday, 4 April 2008 10:28 UK

Investor calls for UBS break-up

Sign outside UBS office
UBS has so far made $37bn of writedowns

Swiss financial giant UBS has come under new pressure from a former chief executive who wants to meet the board to discuss a break-up of the group.

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

The proposals come after UBS said that its sub-prime writedowns have more than doubled to about $37bn (18.5bn).

Olivant, which led a failed bid for Northern Rock, owns 0.7% of UBS.

In a six-page letter to UBS vice-chairman Sergio Marchionne, Mr Arnold advocated selling the group's asset management arm to raise capital and separating its troubled investment bank from its private bank.

UBS's shares rose after news of Mr Arnold's move emerged, gaining as much as 4.6% on the Zurich stock exchange.

UBS's reputation has been comprehensively destroyed
Luqman Arnold

After a fresh writedown of $19bn earlier this week, UBS said it planned to raise 15bn Swiss francs ($15bn; 7.5bn) in capital by issuing new shares to replenish the funds lost in soured investments linked to the US housing slump.

It also said chairman and former chief executive Marcel Ospel would quit.

Mr Arnold's proposals include radical changes to the board, diluting the power of the chairman's office.

He criticised the bank's new chairman Peter Kurer, a 58-year-old Swiss lawyer who has spent the last seven years as the bank's main legal adviser.

He said Mr Kurer 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.

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

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