London’s High Court Dismisses UBS’s $440M Claim Against SoftBank Over Greensill Capital’s Collapse
In a significant court ruling related to the 2021 collapse of financing firm Greensill Capital, London’s High Court has dismissed a $440 million claim from Swiss bank UBS against Japan’s SoftBank, as reported by Financial Times.
Background of the Case
The case revolved around investments that the now-defunct Swiss bank Credit Suisse made with Greensill Capital. The dispute emerged from a complex London court battle between SoftBank and a fund of Credit Suisse. Notably, SoftBank held a stake in Greensill. However, Lord Justice Miles, who presided over the case, concluded that SoftBank “did not orchestrate” the transactions in question.
UBS rescued Credit Suisse from the brink of failure in 2023 and hence took on the case. Switzerland’s largest bank is still dealing with several legacy litigations relating to the Greensill scandal.
Judgment and Reactions
In response to the ruling, SoftBank stated that the judgment “fully vindicates” them and confirmed that the allegations were a baseless effort to redirect blame. The group emphasized their honest conduct and appreciated the judgment for setting the record straight.
On the other hand, UBS acknowledged the High Court’s ruling on the legacy matter. The CS Fund, while reviewing the judgment, stated its commitment to maximizing recovery for the benefit of all stakeholders.
Nature of the Dispute
The dispute centered on $440 million that SoftBank provided to Greensill Capital, supposedly to cover losses suffered by clients of the defunct Swiss bank from investments linked to Greensill. However, the funds were utilized for other purposes as Greensill Capital faced liquidity issues.
In his ruling, Lord Justice Miles wrote that SoftBank “reasonably assumed that the money had been used for the purpose for which it had been sought”. He also highlighted that a message from Greensill to a senior Credit Suisse executive about these transactions was “opportunistic and misleading”.
Implications and Future Actions
While Greensill was not a defendant in the case, the ruling could impact the UK Insolvency Service’s upcoming court proceedings against the financier. The government agency aims to disqualify Greensill from “running or controlling companies” for up to 15 years, accusing him of misconduct related in part to the contentious $440 million transaction.
In retaliation, Greensill is suing the Department for Business, Energy and Industrial Strategy for alleged misuse of private information during the Insolvency Service’s investigation. A High Court hearing is expected to occur next year.
The case has further shed light on Greensill’s connections to other prominent figures in international finance. It also resulted in the release of hundreds of pages of documents from Swiss regulator Finma detailing Credit Suisse’s risk management failings in its dealing with Greensill.
This legal development is an important chapter in the complex saga of Greensill Capital’s collapse. With various legal battles still underway, the complete picture of the financial scandal is yet to fully emerge.
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