From a Rock to a hard place: Arnold targets UBS

By Steve Slater

LONDON (Reuters) - Luqman Arnold, or "Lucky" as he is known, must like a challenge: just months after failing with a rescue bid for Northern Rock he has turned his fire on UBS, the troubled Swiss bank he used to run.

Arnold is demanding a shake-up at UBS. He wants to sell off chunks, potentially including its investment bank unit to reduce it to its wealth management rump.

It's just over six years since Arnold was ousted from UBS, but his plans are about making money rather than revenge, and his boutique investment vehicle Olivant has bought a 0.7 percent stake, worth almost $500 million.

The 57-year-old's plan is backed by intimate knowledge of UBS's strength and weaknesses and deep contacts there.

He was chief executive for less than a year and left after losing a power struggle with Chairman Marcel Ospel in December 2001, reportedly because Ospel agreed to a controversial loan for Swissair without informing Arnold.

Ospel quit last week after UBS doubled its writedown on risky assets to $37 billion, making it the worst hit bank from the U.S. subprime housing crisis.

BATTLE HORN

Arnold has a well traveled past and now lives in London, where his wife, Chumsri, runs a chain of Thai restaurants.