Switzerland’s second-biggest bank has sacked its chief operating officer over an “extraordinary” James Bond-style corporate espionage scandal in which private detectives were hired to follow a senior executive through the streets of Zurich after a row with the organisation’s boss at a cocktail party.

Credit Suisse said on Tuesday that Pierre-Olivier Bouée had left with immediate effect after the board of directors ruled that a two-week spying operation was “wrong and disproportionate and has resulted in severe reputational damage to the bank”. Bouée will collect no payoff.

The bank also announced that a private security consultant who had helped Bouée organise the spying had apparently killed himself. The Swiss financial blog Inside Paradeplatz first reported the man’s death, identifying him only as T. The man killed himself last Tuesday, according to a lawyer for the private investigative firm Investigo.

At a hastily organised press conference in Zurich, the Credit Suisse chairman, Urs Rohner, said he was “greatly saddened” by Bouée’s “extraordinary” decision to hire detectives to track the movements of Iqbal Khan, whose job was to attract super-rich new clients to the bank.

Facebook Twitter Pinterest The Credit Suisse chairman, Urs Rohner, at a press conference on the spying scandal on Tuesday. Photograph: Ennio Leanza/EPA

“This behaviour we do not tolerate it,” Rohner said. “It was wrong to order surveillance … It’s not, obviously, the standard way as to how we conduct business.” He also expressed his deepest condolences to the family of the dead security consultant.

It was outside the upmarket Metropol restaurant near the Swiss National Bank in the centre of Zurich on 17 September that Khan decided to find out why he kept seeing the same car following him around town.

The banker had noticed the car earlier as he and his wife dropped off their six-year-old child at football training. Credit Suisse’s official report into the spying scandal said: “Khan spotted and confronted one of his tails at the corner at the junction of Fraumünsterstrasse and Börsenstrasse.”

Khan had attempted to lose the surveillance team by driving fast and erratically through the streets of Zurich, Switzerland’s financial capital.

As he turned into Börsenstrasse, he leaped out of the car shouting “police, police” and whipped out his phone to take photos of the car number plate and three occupants, who were later revealed to be detectives from Investigo. Swiss police confirmed they had opened “a criminal investigation into coercion/threat”.

Facebook Twitter Pinterest Iqbal Khan, centre, was tailed by private investigators. Photograph: Arnd Wiegmann/Reuters

The private detectives had also followed Khan on foot, and used the encrypted messenger service Threema, which made it impossible for Homburger, the law firm that investigated the spying scandal on behalf of Credit Suisse, to discover the full extent of the covert surveillance.

The bank admitted Khan had been “observed on seven business days” since 4 September. It also said the spying had been conducted “mostly during daytime”.

Khan, 43, was born in Pakistan and moved to Switzerland aged 12. He was reportedly ambitious to rise further up the ranks at Credit Suisse but had been frustrated by Credit Suisse’s chief executive, Tidjane Thiam 57.

Personal relations between Khan and Thiam – the former head of the British insurance company Prudential – soured further when Khan bought a house next door to his boss in the village of Herrliberg on the so-called “gold coast” of Lake Zurich.

Khan had the house levelled to the ground, and rebuilt over two years with contractors often working early mornings and at weekends, prompting Thiam to complain to Rohner.

In an attempt at a rapprochement, in January Thiam invited Khan and his wife to a cocktail party for senior colleagues and friends in the ultra-wealthy neighbourhood on the north-east coast of Lake Zurich.

But they reportedly had a heated argument about a row of trees Thiam had planted on his property that partially blocked Khan’s view of the lake. Khan’s wife had to stand between the two men to stop the dispute escalating further, according to a report by the Swiss newspaper Tages-Anzeiger. Khan then also made a complaint to Rohner.

The bank conceded Khan and Thiam had “a dispute, a heated discussion”, but Rohner said the official inquiry had not investigated the executives “personal differences” or the “alleged planting of trees”.

But Rohner said there was “zero evidence” that Thiam knew about the spying, despite the long history of personal animosity between the two multimillionaire executives. “We strongly reject any assertions that call into question the integrity of our CEO,” said Rohner.

Credit Suisse’s board found that Bouée had ordered the detectives to follow Khan under the misguided notion that the executive might be trying to persuade clients to move to the bank’s arch-rival UBS, which Khan was joining. The bank said there was no evidence to suggest Khan was seeking to poach clients. Khan’s first day at UBS following garden leaving is Tuesday.

“The chief operating officer assumed responsibility for this matter and submitted his resignation to the board of directors, which has been accepted with immediate effect,” the bank said. “The Homburger investigation did not identify any indication that the chief executive had approved the observation of Iqbal Khan nor that he was aware of it prior to 18 September 2019, after the observation had been aborted.”

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In advance of the investigation’s publication, Credit Suisse’s largest shareholder, Harris Associates, had publicly called on the bank’s board not to sack Thiam or any other executives over the incident. “These are humans; people aren’t flawless,” Harris’s deputy chairman, David Herro, told the Financial Times. “They don’t make perfect decisions every time. And this is why, unless laws have been broken, this doesn’t seem like a case for anyone losing their job.”