Fugitive Chinese tycoon Guo Wengui sues UBS for US$500 million over deal gone awry
- He claims the bank pressured him into borrowing money tied to the purchase of shares in brokerage Haitong Securities
- Businessman says his investment was wiped out when UBS forced the sale of the stock during a market rout
Guo, who has lived in exile in New York for more than five years, sued UBS in London, saying the bank pressured him into agreeing to borrow money tied to the purchase of shares in Chinese brokerage Haitong Securities. Guo said UBS forced the sale of the stock amid a market rout and a 45 per cent plunge in Haitong’s Hong Kong-traded shares in 2015, wiping out his investment.
UBS said in a statement it “strongly disagrees with the claim and will vigorously defend itself”.
It is not the first time Guo has brought such a lawsuit, after failing to get the claim heard in New York. He said he was not initially aware that UBS had inserted margin call agreements into the contracts.
UBS advised Guo to structure the deal through an intermediary to avoid breaching thresholds that would require him to disclose his holding, he said in a legal filing. He agreed that the shares in Haitong would be first acquired by a Chinese state-backed investment fund. But after dumping the stock, the firm passed on the loss to Guo.
