Guo Wengui, a wealthy Chinese businessman with close ties to Steve Bannon, stepped up his fight to claim $500 million from UBS Group that he lost after the bank called in a margin loan.
Guo, who’s 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 Co. Guo said UBS forced the sale of the stock amid a market rout and a 45% 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’s 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 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.
The fugitive tycoon has used social media to hurl allegations at Chinese government leaders from afar. He has linked up with Bannon, saying he likes the former adviser to President Donald Trump because he takes seriously Guo’s allegations that China seeks to create turmoil in the U.S.
Bannon was on Guo’s yacht off the coast of Connecticut when he was arrested in August and charged with conspiring to siphon hundreds of thousands of dollars from a campaign to raise funds for a wall on the U.S.’s southern border.
UBS had internal policies not to make margin calls to “highly valued customers” such as Guo if prices tied to the loan moved in the short term, a lawyer for the businessman said in the filing. In another high-profile financing transaction, involving Chinese insurer Ping An Insurance Group Co., UBS had also agreed not to make margin calls, the lawyer said.
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