Swiss Life ousts CEO amid fund inquiry and accounting errors

The board of Swiss Life yesterday ousted its chief executive, Roland Chlapowski, after a series of accounting errors, the launch of a criminal investigation in to investment gains made by senior managers, and nosediving profits.

The group is trying to raise between 900m and 1.2bn Swiss francs (£460m) through a rights issue to prop up its capital base. It yesterday insisted the issue, which is due to be priced next week, was still on track.

At a board meeting in Zurich yesterday, the chairman, Andres Leuenberger, elected Rolf Dörig as the group's new chief executive with immediate effect. Mr Chlapowski will leave the company at the end of 2002.

Swiss Life reported its biggest ever loss last month of Sfr386m, leading it to launch the rights issue.

Days before the group sought approval from shareholders to raise the funds, an accounting error was discovered that forced it to restate its half-year loss to Sfr578m after tax, up by Sfr192m. The error was blamed on a new computer system that had valued maturing bonds incorrectly.

The success of the rights issue has been put under further pressure after the launch of an investigation into an investment scheme, called Long Term Strategy (LTS), that enabled Swiss Life's managers to make millions. The inquiry by Swiss prosecutors followed pressure from shareholder action groups unhappy at the existence of the fund, which was set up to allow managers to make investments alongside the group. Swiss Life has denied any wrongdoing.

Dr Leuenberger said: "The board is aware that confidence has been lost, partly because of the accounting errors but also because of the debate over LTS. It is vital to reinforce customers' and investors' faith in Swiss Life again, and quickly, as well as the confidence of the authorities and the general public."

Mr Dörig, 45, has pledged to "put the company back on the road to success". He joins Swiss Life from Credit Suisse Financial Services where he ran its corporate and retail banking division.