Lex Greensill will testify in court for the first time since the high-profile collapse of his trade finance firm, as a $440 million Credit Suisse lawsuit against SoftBank Group Corp. gets underway.
Evidence from the embattled financier will be the centerpiece of a month long London trial that starts on Thursday over investor losses in a failed startup. Credit Suisse is seeking damages from SoftBank alleging that a series of transactions with Greensill deprived its investors of $440 million in funds.
Greensill is scheduled to appear at the civil trial next week alongside other witnesses including former chief executive officer of Credit Suisse’s investment bank Eric Varvel.
The implosion of Greensill Capital in March 2021 saw Credit Suisse freeze and wind down a $10 billion group of funds that the Swiss bank had marketed to clients as safe investments.
Greensill’s demise was one of several major scandals that knocked confidence in the Swiss lender, left clients with hundreds of millions of dollars of losses and ultimately led to its forced takeover by UBS. Meanwhile, SoftBank’s Vision Fund wrote down its own $1.5 billion holding in Greensill to close to zero.
UBS Group AG is pursuing the London claim on behalf of its former Swiss rival in a bid to recover funds for investors trapped in the supply chain finance vehicles. The bank has looked to settle several high profile legacy legal headaches it inherited from Credit Suisse, extricating itself from a sprawling civil suit over Mozambique tuna bonds and more recently a US tax probe.
The fallout from Greensill’s collapse has spawned multiple legal fights around the world. Lex Greensill himself is fighting moves by the UK government to have him disqualified as a director, while his firm’s own administrators filed a civil case against him in April. His spokesperson didn’t respond to a request for comment.
The London suit is set to consider the way that Greensill restructured its relationship with Katerra Inc., a US-based construction company in which SoftBank was a major investor. Credit Suisse alleges SoftBank concocted the restructuring in 2020 so that it could pull its own money out of the firm, knowing full well that Greensill, already in free-fall, would be unable to repay the $440 million it owed to Credit Suisse.
SoftBank will counter that Credit Suisse case has always been an attempt to shift blame “for its own poor investment decisions.” The allegations are “entirely without merit,” it said previously. Softbank’s lawyers argued that the $440 million funds were provided by the Vision Fund on the basis that it would be used to repay the Credit Suisse notes.
UBS said the bank “will continue to pursue all paths to maximize financial recovery of the Supply Chain Finance Funds, acting in the interests of all our stakeholders.”
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