A former Chinese billionaire with ties to President Donald Trump’s legally embattled confidante Steve Bannon has sued UBS again–this time in London–for allegedly pressuring him into borrowing money against the main source of his wealth–a decision that ultimately tanked his fortune by nearly $500 million.
In a lawsuit taken to London’s High Court, New York-based Guo Wengui claimed Swiss bank UBS Group AG pressured him into borrowing $500 million for the purchase of shares in Chinese brokerage Haitong Securities Co., Bloomberg reported early Friday.
According to court documents, UBS issued a margin call on the borrowed money after shares of Guo plunged by 35% in the three months leading up to July 2015–a move that essentially required Guo to transfer at least $200 million to UBS within 24 hours to stop the bank from selling shares at a steep loss, which is what UBS ultimately did after Guo failed to transfer the funds.
Chinese-born Guo, who also goes by the name Miles Kwok, claims he was initially unaware that UBS had written the margin call agreements into his contracts, Bloomberg reported.
After the stock sale, UBS returned just $4.7 million to Guo, court documents show, effectively wiping out virtually all of Guo’s $500 million investment.
In a statement to Forbes also shared with Bloomberg, UBS simply said it “strongly disagrees with the claim and will vigorously defend itself.”
Guo previously brought forth a similar suit in New York, but officials dismissed it, claiming they lacked appropriate jurisdiction to rule on an investment made in Hong Kong.
50-year-old Guo dropped off Forbes’ Billionaires list after court documents in 2016 revealed that shares he held in Haitong–the main source of his wealth at the time–were frozen as a result of the UBS dispute. Shares of Hong Kong-listed Haitong peaked in April 2015 and then plummeted 55% during a broad market sell-off in the following months. Guo reportedly started his career as a public servant in eastern China before fleeing the country in 2015 amid a corruption scandal charging him with bribery. He claims the Chinese government is trying to prevent him from exposing its corruption.
Guo, who Forbes estimates was worth $1.1 billion in early 2015, has cozied up to U.S. tycoons and even became a member of President Donald Trump’s Mar-A-Lago resort in Florida. A mutual distaste for the Chinese government brought together Guo and Bannon, who was on Guo’s yacht when he was arrested for allegedly taking out more than $1 million from the “We Build The Wall” fundraising effort to use for personal expenses.
UBS Sued for $500 Million by Chinese Tycoon Over Deal Gone Awry (Bloomberg)
Chinese Fugitive Guo Wengui Lost $500 Million In UBS Margin Call (Forbes)
The Mystery of the Exiled Billionaire Whistle-Blower (NYT)
China’s 400 Richest 2020: Total Wealth Surges Amid Pandemic (Forbes)