Page last updated at 13:25 GMT, Wednesday, 27 February 2008

UBS seeking capital plan backing

Sign outside UBS offices in New York
UBS has been one of the banks worst-hit by sub-prime debt

UBS boss Marcel Ospel has told an angry shareholder meeting it is essential they back a 13bn Swiss franc ($11.94bn: 6bn) overseas capital injection.

Singapore's investment arm has bought shares in the bank for almost $10bn, while an unnamed Middle Eastern investor has also taken a stake.

As chairman, Mr Ospel has been under fire after Switzerland's biggest bank was hard-hit by the sub-prime crisis.

UBS wrote down 15.6bn Swiss francs in 2007 and made a 4.4bn franc loss.

'Road to success'

"We had failed to recognise the signals from the US housing market in time... there is no doubt that we judged a number of developments wrongly," Mr Ospel said.

There have been calls for Mr Ospel to quit but he told a 6,500-strong extraordinary shareholders meeting in Basle that he would remain.

"I would never thoughtlessly relinquish my responsibility, and I intend to ensure that UBS gets back on the road to success," he said.

He is due up for re-election at UBS's scheduled annual general meeting on 23 April.

Last week, UBS proposed that it would recommend Mr Ospel's re-election, but only for one year as opposed to the traditional three-year term.

Mis-selling claim

Smaller shareholders say they are being ignored in the recapitalisation effort. They believe they could be put at a disadvantage if the investment injection goes ahead.

They have tabled a motion calling for a special audit of UBS's accounts for the last year.

But Mr Ospel opposes the move, saying the bank is already co-operating with a review by Switzerland's federal banking commission.

Earlier in the week, it emerged that Germany's HSH Nordbank is to sue the firm for mis-selling, alleging that it did not manage the assets in line with its "prudent investment objectives".

Rival financial giants, including Merrill Lynch, Citigroup and many European banks, are struggling to repair their balance sheets and reputations after disastrous sub-prime investments.

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