The billionaire businessman Mike Ashley has claimed he was the victim of âabuseâ by Morgan Stanley amid a high court dispute over the investment bankâs decision to impose a near $1bn (£790m) cash demand.
Ashleyâs Frasers Group is taking legal action against the US investment bank Morgan Stanley and Denmarkâs Saxo Bank over the May 2021 move linked to bets placed on shares in the German retailer Hugo Boss.
Frasers wants £40m in compensation for alleged costs and lost trading profits after Morgan Stanley imposed a âmargin callâ â a demand for collateral â to cover any potential losses on shares in Hugo Boss that the UK retail group was speculating on.
Lawyers for Frasers told the court the margin call was made by the US bank to allegedly produce âthe forced eviction or close out of Frasersâ open positions in Hugo Boss sharesâ.
During the hearing in London, Ashley claimed Morgan Stanley had acted âgrotesquelyâ.
Saxo Bank and Morgan Stanley deny the claims, with barristers for the US bank saying the allegations were âdivorced from the legal and factual realityâ.
Giving evidence on Thursday, Ashley was asked by Morgan Stanleyâs barrister, Camilla Bingham KC, whether he agreed with his lawyers in suggesting he was a victim of âsnobberyâ.
She asked: âYour lawyers suggest that Morgan Stanley maintained the margin call at least in part as a result of snobbery. You donât believe that.â
Ashley replied: âI do believe that there is an element of that, yes.â Bingham then asked: âSo are you a victim?â The businessman said: âI am a victim of Morgan Stanleyâs abuse.â
Frasers, which was known as Sports Direct International until 2019, owns a wide range of companies including House of Fraser, Game, Jack Wills, Sports Direct and Missguided.
Ashley was the groupâs chief executive at the time of the Hugo Boss incident, but stepped down from the role in 2022. He remains Frasersâ majority shareholder.
In written arguments, Adrian Beltrami KC, representing Frasers, said Morgan Stanleyâs âerratic behaviourâ was âat least partly the result of snobberyâ towards Ashley.
He said this was fuelled by a personal dislike of Ashley from a Morgan Stanley banker, which the barrister suggested was âclass-drivenâ and because the businessman was seen as an âupstartâ.
Beltrami said the margin call âsimply 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 Stanleyâs booksâ.
The move resulted in Saxo Bank, which acted as a broker, then asking Frasers to pay $900m, something Beltrami said would have been âdisastrousâ for the company. The request was eventually blocked by the high court in June 2021 after Ashley took legal action.
The retailer said on Thursday that he was in âdisbeliefâ when Morgan Stanley made the margin call.
But Bingham said in her written submissions that Frasersâ claims were ânot grounded in any form of recognisable legal or factual realityâ and that it had âembarked on âlawfareâ against Morgan Stanley on an extraordinary scaleâ despite suffering âno true lossâ.
When asked what the objective was, Ashley replied: âIt is to show how, in my opinion, grotesquely and unfairly Morgan Stanley acted.â
Bingham also asked Ashley: âIs doing the right thing a mantra you live by?â He replied: âI like to think so, yes.â
The trial before Mr Justice Bryan is due to conclude next month, with a judgment expected at a later date.