BRITISH retail tycoon Mike Ashley’s Frasers Group has withdrawn its London lawsuit against Morgan Stanley over a nearly US$1 billion margin call, a spokesperson for the Wall Street bank said on Friday.
Frasers had sued Morgan Stanley for about 47 million euros (S$68.3 million) after the bank imposed the margin call – security to cover possible losses – on the retailer’s trading position in German fashion group Hugo Boss in May 2021.
Ashley, whose fortune is estimated by Forbes to be worth US$5.1 billion, gave evidence at the trial at London’s High Court in February that the demand for collateral left him in “total shock”.
Frasers has dropped its lawsuit before the court gave its ruling, Morgan Stanley said on Friday.
“Frasers Group and Mr Michael Ashley have both withdrawn their claims against Morgan Stanley on terms which do not involve any payment of monies by any party to any other,” a spokesperson for the bank said in a statement.
“Frasers, Mr Ashley and Morgan Stanley confirm that the disputes between them are therefore resolved.”
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Frasers did not immediately respond to a request for comment.
The company’s lawyers had argued the bank changed the purpose of its US$915 million margin call after discovering Frasers stood behind trades held by its client, Saxo Bank.
Frasers alleged Morgan Stanley’s staff saw Ashley as an “upstart” and used the margin call to force trades held by off its books partly out of snobbery.
Morgan Stanley, however, said it had no contractual relationship with Frasers, only with Saxo, and argued the margin call was designed to ensure it was properly protected from exposure to stock market bets.
The margin call came two months after the collapse of family office Archegos Capital, in which Morgan Stanley lost US$911 million.
Saxo and Frasers had settled their case separately before the trial. REUTERS
