LONDON, June 11 (Reuters) - Billionaire Nordic investor Alexander Vik appeared at a London court on Wednesday to begin giving evidence in his $8 billion damages claim against Deutsche Bank over trades by his company Sebastian Holdings during the financial crisis.
In the case, one of the largest claims heard by the High Court in London, Sebastian Holdings alleges it ran up big losses after Deutsche Bank put through trades which it shouldn’t have as Sebastian’s prime broker between 2006 and 2008.
The damages claim is a countersuit to legal action brought by the German bank, which alleges the investment company owes it $250 million for unpaid margin calls in 2008.
Deutsche Bank has said it would vigorously defend itself against damages claims the bank said were without merit.
Vik’s arrival at court attracted local photographers and press, as well as media from his native Norway, where there is great interest in the secretive businessman.
Looking smart in a dark blue suit and patterned tie, a relaxed Vik responded confidently to questions posed by Deutsche Bank lawyers.
“I am successful, hard-working, an experienced investor and company manager, but I am not a professional trader,” Vik said when asked about the highly-leveraged and complex currency trades undertaken for Sebastian Holdings that are at the centre of the case.
In October 2008, when financial markets tumbled, these trades went sour. Sebastian Holdings had $1 billion of its equity wiped out and faced $511 million in margin calls - a demand by a broker that an investor deposit more cash to cover potential losses on trades.
Sebastian Holdings said these trades were unauthorised and should not have been booked by Deutsche Bank. It also alleges the bank failed to inform it that the collateral needed to guarantee the high-risk trades would exceed a pre-arranged $35 million limit.
Deutsche Bank denied the allegations and maintains it had no obligation to monitor and control the transactions.
“I am an investor, a long-term investor ... but financial products are very difficult to understand. It’s not possible for me to have product knowledge,” Vik said.
The Norwegian, who studied economics at Harvard University and spent 10 years working as a stock broker before setting up his own businesses, has made a large personal fortune through internet investments, luxury hotels and real estate development.
He told the court he could not recall what his personal wealth was at the beginning of his relationship with Deutsche Bank and described the court’s requests to see documents relating to one of his personal bank accounts as “complete nonsense”.
Vik, who also owns a vineyard in Chile and a premium Norwegian vodka brand, is scheduled to give evidence into next week. The case is expected to conclude at the end of this month.
A separate case between Sebastian Holdings and Deutsche Bank in New York is also expected to resume this month.