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Morgan Stanley bankers dropped a ‘nuclear bomb’ on my business, says Mike Ashley

Mike Ashley
Mike Ashley arriving at the High Court for the Frasers' case against Morgan Stanley - David Rose

Mike Ashley has accused Morgan Stanley of dropping a “nuclear bomb” on his business with a demand for $1bn (£790m) that he alleges was motivated by “snobbery”.

Lawyers for the retail billionaire accused the Wall Street bank of a “class-driven” decision when it attempted to force Mr Ashley’s company Frasers Group to abandon bets on the share price of Hugo Boss.

Giving evidence in the High Court, Mr Ashley branded Morgan Stanley’s sudden demand for $1bn of collateral in May 2021 “completely unbelievable”.

The tycoon, who was chief executive of Frasers at the time, said: “You might as well have said a nuclear bomb landed in Slough – it couldn’t happen. You’re in total shock.”


Frasers Group alleges that Morgan Stanley’s actions cost the retail empire millions of pounds.

Morgan Stanley did not deal directly with Frasers. The stock bets were at risk of being closed out using a process known as a margin call, where parties are asked to deposit extra cash to backstop their investment positions.

The Wall Street bank passed a margin call to Saxo Bank, which dealt with Frasers.

Frasers is now suing Morgan Stanley for about €47m (£40m) over alleged costs and lost trading profits after the bank’s decision.

Adrian Beltrami KC, a lawyer for Frasers, claimed that Morgan Stanley changed the purpose of its $915m margin call on May 28, 2021, after discovering that the retailer stood behind trades held by Saxo.

He told the High Court: “Even if legitimate when made, it was not legitimate when pursued.”

Frasers claims the cash call was capricious, in breach of market practice and designed to force the company to close or move its positions and cause it harm.

In court filings quoting bank staff, Frasers said Mr Ashley was viewed as an “upstart”, who would have “zero respect to the norms of the way in which we do business”.

Frasers said Morgan Stanley’s negative reaction when Mr Ashley tried to become a bank client was “class-driven, no doubt about it”.


‘We just don’t like him’: Mike Ashley goes to war with Morgan Stanley

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Morgan Stanley, which dismisses the claim as contrived and without merit, argues it had no contractual relationship with Frasers, only with Saxo.

The New York lender says that the margin call, based on a potential 400pc rise in Hugo Boss shares, was designed to ensure it was properly protected from exposure to stock market bets.

Camilla Bingham KC, Morgan Stanley’s lawyer, said: “Everything else is noise and smoke screen for the truth.”

She also argued that not even paranoid readers of the court documents could detect a sense of “snootiness” from the Wall Street titan.

Frasers said it “avoided the worst” of the potential consequences from Morgan Stanley’s behaviour after obtaining a court injunction blocking the investment bank from closing out the Hugo Boss trades.

These were later transferred from Morgan Stanley to rival bank HSBC.

Mr Ashley said the phone call from HSBC confirming the move as “the most remarkable phone call of my entire working business life”.

The entrepreneur said: “No one had ever saved me before or since in the way that HSBC did. They were so instrumental in avoiding a disaster it’s beyond words.

“I wouldn’t have given myself a snowball’s chance in hell of them saying yes.”

The 59-year-old said that building a large stake in Hugo Boss allowed Frasers to “really look under the bonnet” of the German designer brand.

However, Frasers argues it was “frozen” out of further trades in Hugo Boss stock following Morgan Stanley’s margin call.

After taking the stand, Mr Ashley was questioned on why WhatsApp and text messages between himself and Frasers’ finance chief, Chris Wootton, had been deleted despite strict court instructions to preserve evidence.

Mr Ashley – dressed in a light grey blazer, navy chinos and black loafers –  also told the court that he does not use email or keep documents.

Ms Bingham KC described Mr Ashley as an “experienced litigator” and argued he should have been aware of these rules.

Mr Ashley denied suggestions that he takes “guilty pleasure” from legal disputes and claimed it comes with the territory of being the former owner of Newcastle United football club.

He said: “I wouldn’t say I am an overly litigious person. If anything I would try and avoid it. It’s not a very pleasant experience and you don’t really want to be wasting vast amounts of time on unnecessary litigation if you can avoid it.”

The case continues.