Reports said that Guo Wengui, now an exile living in New York, has sued the Swiss bank in London over a financial transaction. The bank said it will strongly contest the claim.
UBS yesterday told this publication that it will vigorously contest a $500 million claim from a Chinese businessman that he lost money after the Swiss bank called in a margin loan.
A report from Bloomberg last Friday said that Guo Wengui has “stepped up” his fight to claim the money. Guo, who has lived in exile in New York for more than five years, sued UBS in London, saying that the bank pressured him into agreeing to borrow money tied to the purchase of shares in Chinese brokerage Haitong Securities, the report said. Guo said that 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 strongly disagrees with the claim and will vigorously defend itself,” a spokesperson for the bank told this news service when asked about the matter. It added no further comment.
The Bloomberg article, reiterated in the Business Times (of Singapore), said that this is not the first time Guo has brought such a lawsuit, after failing to get the claim heard in New York. He said he wasn't initially aware that UBS had inserted margin call agreements into the contracts.
UBS advised the businessman to structure the deal through an intermediary to avoid breaching thresholds that would require him to disclose his holding, Guo 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.
Guo has made claims against the Chinese government via social media channels. The report said he is linked with Steve Bannon, a former advisor to President Donald Trump.