(Corrects para 13 to clarify the incident occurred last week, not last month)
* CS-turned-UBS banker Khan filed complaint after incident
* Zurich prosecutors probe possible coercion
* Credit Suisse contends reports are sensational
ZURICH, Sept 23 (Reuters) - Prosecutors have opened a criminal probe into an incident in which Credit Suisse allegedly hired private detectives to shadow the Swiss bank's ex-wealth management head, Iqbal Khan, the Zurich attorney's office said on Monday.
Khan, a rising star in Swiss finance, is moving to rival bank UBS to head its wealth management unit in October, just three months after leaving Credit Suisse.
Swiss newspaper SonntagsZeitung, without citing its sources, reported on Sunday that Credit Suisse had hired three detectives to investigate whether Khan was seeking to lure its employees to UBS.
The Zurich attorney's office said Khan filed a criminal complaint last week alleging threats and coercion in a Sept. 17 confrontation, but did not say who made the threats or what they were.
"As a result of a criminal complaint (by Khan)...the Zurich District Attorney has opened a criminal investigation into coercion/threat," a prosecutors office spokesman said in an email.
Khan, via a spokesman, denied trying to poach Credit Suisse workers for his new employer.
"Suspicions that he was trying to hire people away from Credit Suisse are absurd," the spokesman said.
SonntagsZeitung said one of the men allegedly following Khan sought to take Khan's phone after he tried to take a photograph of the detectives' car.
Credit Suisse Chief Executive Tidjane Thiam and Chairman Urs Rohner said a detailed inquiry was under way, but sought to play down the media reports.
"There are significant inaccuracies in the reporting that have sensationalised both facts and events," the two leaders wrote in the memo seen by Reuters.
"Please rest assured that a detailed inquiry has been launched by the Board of Directors into these events and we are confident that the truth will emerge."
Khan, the son of Pakistani immigrants who came to Switzerland when he was 12, is seen in Swiss banking circles as a potential future CEO of a big Swiss bank, such as UBS.
Swiss media, including financial industry website Inside Paradeplatz, reported that the incident last week began when Khan, 43, and his wife were tailed by another vehicle carrying three men to near the Swiss National Bank building in the heart of Zurich's financial district.
Khan stepped from his car and attempted to photograph the other vehicle with his cell phone.
SonntagsZeitung reported that the occupants of the other vehicle fled after passers-by noticed the altercation, adding the three men were eventually detained for questioning.
Financial institutions including in Switzerland are covetous of client-employee relationships, and sometimes place employees or ex-employees under intense scrutiny to ensure they do not violate non-compete clauses or other contractual obligations.
"Mostly, such practices never meet the light of day," Swiss reputation consultant Bernhard Bauhofer told Swiss tabloid Blick.
Khan announced his resignation from Credit Suisse in July "to pursue other opportunities".
UBS said last month that it had appointed Khan to co-head its flagship wealth management business starting on Oct. 1 as part of a broader shake-up of its executive board.
UBS and Swiss financial supervisor FINMA declined to comment. (Writing by John Miller, reporting by Angelika Gruber and Oliver Hirt, editing by Louise Heavens and Susan Fenton)