Mike Ashley brands Morgan Stanley bankers ‘snobs’ as £40m legal fight begins

Tycoon Mike Ashley accused Morgan Stanley of snobbery on the first day of a £40million legal battle in the High Court.

Frasers Group, which is controlled by Ashley and owns brands such as Sports Direct and House of Fraser, has taken the US investment bank to court in a row over its stake in fashion label Hugo Boss.

Frasers accused Morgan Stanley of making a ‘capricious’ and inappropriate move to force its business off the bank’s books in May 2021 having taken a ‘personal dislike’ to Ashley which was based on ‘class’.

Adrian Beltrami KC, a lawyer for the retail giant, accused the bank of viewing Ashley as an ‘upstart’.

He said Morgan Stanley only acted after discovering Frasers was behind the trades.

Showdown: Mike Ashley outside the High Court yesterday on the first day of his £40m legal battle with Morgan Stanley

The two-week trial between the billionaire and investment bank centres around Morgan Stanley imposing an £800million ‘margin call’ on Frasers’ trading position in Hugo Boss in May 2021.

Frasers had built its stake from 2019 through broker Saxo Bank, which then used Morgan Stanley to execute and clear the trades.

In a sudden move, the bank imposed a ‘margin call’ on May 25 2021 – collateral to cover possible losses on a trade – on the shares.

This caused Saxo Bank to demand around £713million from Frasers.

Ashley told the court this demand was ‘completely unbelievable’, adding: ‘You might as well have said a nuclear bomb has landed in Slough.’

The tycoon and his team were left ‘drained’ by the debacle.

Beltrami claimed this action cost Frasers around £40million – although the bank disputes it lost out at all.

Trendsetter: Brazilian supermodel Gisele Bundchen for Hugo Boss

According to Beltrami, Morgan Stanley treated Ashley’s attempt to become a client with disdain and this was ‘class-driven, no doubt about it’.

The lawyer claimed that the bank’s staff took a ‘personal dislike’ to Ashley, and claimed they said he would have ‘zero respect to the norms of the way in which we do business’.

Morgan Stanley’s lawyer, Camilla Bingham KC, said Frasers’ claims were ‘not grounded in any form of recognisable legal or factual reality’.

She said Frasers did not suffer any loss in the value of its Hugo Boss positions. The bank argues it did not know who stood behind the trades and it had no contractual relationship with Frasers, just with Saxo.

It argues staff had no issue with Ashley but instead were concerned about the size of the Boss position and acted to protect it from exposure to stock market bets.

‘Frasers has embarked on “lawfare” against Morgan Stanley on an extraordinary scale,’ the bank argued.

‘Frasers advances wild allegations of bad faith and irrationality and asks the court boldly to go where it has never gone before,’ it added.

Ashley’s shares in Hugo Boss are owned through Frasers, and held through a complex series of contracts which means Ashley is in overall control.

Ashley, who is worth £4.1billion according to Forbes, has garnered a lively reputation since he opened the first Sports Direct store in Maidenhead in 1982.

Various controversies include claims of him vomiting into a pub fireplace during a boozy work meeting to scandals over working conditions at his shops and warehouses.

Although he handed the reins of the business to his son-in-law, Michael Murray, a couple of years ago, Ashley is the controlling shareholder.

Frasers owns a roster of well-known chains including House of Fraser, Flannels, Gieves & Hawkes and I Saw It First.

This post first appeared on Dailymail.co.uk