Mike Ashley ‘victim of abuse’ by US bank, High Court told

Billionaire businessman Mike Ashley has claimed he was the victim of “abuse” by Morgan Stanley amid a High Court dispute over the investment bank’s decision to impose a near one billion dollar (£0.79 billion) margin call.

Mr Ashley’s Frasers Group is taking legal action against American financial giant Morgan Stanley and the Danish Saxo Bank over the May 2021 move linked to options over shares in the German retailer Hugo Boss.

Lawyers for Frasers told the court that the margin call was made by the US bank to allegedly produce “the forced eviction or close out of Frasers’ open positions in Hugo Boss shares”.

Amid an ongoing trial in London, Mr Ashley claimed Morgan Stanley had acted “grotesquely”.

Saxo Bank and Morgan Stanley deny the claims, with barristers for the American bank saying the allegations were “divorced from the legal and factual reality”.

She asked: “Your lawyers suggest that Morgan Stanley maintained the margin call at least in part as a result of snobbery. You don’t believe that.”

Mr Ashley replied: “I do believe that there is an element of that, yes.”

Ms Bingham asked: “So are you a victim?”

Mr Ashley said: “I am a victim of Morgan Stanley’s abuse.”

Frasers – known as Sports Direct International until 2019 – owns a wide range of companies including House of Fraser, GAME, Jack Wills, Sports Direct and Missguided.

Mr Ashley was the group’s chief executive at the time of the margin call – a requirement to increase the amount of equity in an account – but stepped down from the role in 2022. He remains its majority shareholder.

The trial is being held at the Rolls Building in London (Nick Ansell/PA)
The case is being heard at the Rolls Building in London (Nick Ansell/PA)

He said this was fuelled by a personal dislike of Mr Ashley from a Morgan Stanley banker, which he suggested was “class-driven” and because Mr Ashley was seen as an “upstart”.

Mr Beltrami said the margin call “simply became the vehicle by which Morgan Stanley would enforce that which it was otherwise not entitled to require, namely the total removal of the trades from Morgan Stanley’s books”.

The move resulted in Saxo Bank, who acted as a broker, then asking Frasers to pay 900 million dollars (£712 million), something Mr Beltrami said would have been “disastrous” for the company before the request was blocked by the High Court in June 2021.

But Ms Bingham said in her written submissions that Frasers’ claims “are not grounded in any form of recognisable legal or factual reality” and that it had “embarked on lawfare against Morgan Stanley on an extraordinary scale” despite suffering “no true loss”.

She added that there was a “smorgasbord of reasons” why the claim should be dismissed and urged the court to reject Frasers’ “flawed, contrived and brazen” case.

On Thursday, she asked Mr Ashley whether Frasers’ board of directors was informed of the legal action being taken.

Mr Ashley said that it was not, adding that “money is not the objective” and that the costs of the case are “not a sizeable sum of money for Frasers”.

When asked what the objective was, Mr Ashley replied: “It is to show how, in my opinion, grotesquely and unfairly Morgan Stanley acted.”

Ms Bingham also asked Mr Ashley: “Is doing the right thing a mantra you live by?”

He replied: “I like to think so, yes.”

The trial before Mr Justice Bryan is due to conclude next month, with a judgment expected at a later date.

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