Mike Ashley pursuing legal claim against Morgan Stanley

Sports Direct founder Mike Ashley pursuing a legal claim against investment bank Morgan Stanley

Trading: Mike Ashley wanted to build up his stake in Hugo Boss

Sportswear tycoon Mike Ashley is pursuing a legal claim against investment bank Morgan Stanley. 

The Sports Direct founder’s company Frasers alleges the bank acted in ‘bad faith’ over trades he made to build his stake in fashion giant Hugo Boss which is now worth £770million. 

His shares in the German brand are owned through Frasers – and held through a complex series of contracts which put Ashley in overall control of them. 

Court documents claim Morgan Stanley ‘intended to harm’ Frasers by indirectly forcing the firm to transfer Hugo Boss stock options.

The imposed ‘margin call’ on the shares cost Frasers money and Morgan Stanley action was ‘recklessly indifferent’, the papers say. 

They say attempting to force such a trade was based on the incorrect assumption that Frasers would behave as an ‘activist’ to agitate for changes at Hugo Boss, despite assurances it would not. 

Imposing the margin call would have caused ‘significant commercial and reputational damage’ for Frasers, and led to ‘unwarranted speculation as to Frasers’ financial position’, Ashley’s lawyers argue. 

His group has been linked with a takeover of Hugo Boss, but has firmly denied the rumours.

Its products are sold in his Flannels and House of Fraser stores. 

Court papers reveal Ashley offered £100million in cash and his entire £1.9 billion Frasers’ stake in collateral to avoid the margin call, but the eye-watering package was refused. 

Frasers was forced to close out or transfer some of his share options in Hugo Boss. 

Denmark’s Saxo Bank, an intermediary through which Frasers built its stake in Hugo Boss, has also been listed as a defendant. 

A Morgan Stanley spokesman said: ‘We believe this claim is contrived and without merit, and we will defend it vigorously.’ 

Frasers Group and Saxo Bank were both contacted for comment.

Read more at DailyMail.co.uk